research study report on assessment of …tsspdcl has clearly stated its objectives as given below:...

RESEARCH STUDY

REPORT ON

ASSESSMENT OF

CORPORATE

GOVERNANCE

PRACTICES IN STATE

LEVEL PUBLIC

ENTERPRISES OF

ANDHRA PRADESH &

TELANGANA Submitted to National Foundation for

Corporate Governance

Survey Report

2014-

15

ADMINISTRATIVE STAFF COLLEGE OF INDIA

Administrative Staff College of India

SURVEY REPORT

INDEX

S No Name of SLPE Page No

1 The Telangana Southern Power Distribution Company Ltd. (TSSPDCL)

1-18

2 Transmission Corporation of Andhra Pradesh Ltd. (APTRANSCO)

19-35

3 The Singareni Collieries Company Ltd. (SCCL) 36-53

4 Andhra Pradesh State Financial Corporation (APSFC) 54-69

5 Andhra Pradesh State Road Transport Corporation (APSRTC)

70-87

6 New & Renewable Energy Development Corporation of Andhra Pradesh Ltd. (NREDCAP)

88-101

7 Andhra Pradesh Tourism Development Corporation Ltd. (APTDCL)

102-116

8 The Andhra Pradesh Mineral Development Corporation Limited (APMDCL)

117-132


SURVEY REPORT

Survey Report 1

THE TELANGANA SOUTHERN POWER DISTRIBUTION

COMPANY LIMITED (TSSPDCL)

1. Company profile :

1.1 Incorporation

Central Power Distribution Company of Andhra Pradesh was

incorporated under The Companies Act 1956 in the year 2000, as

a sequel to Andhra Pradesh Electricity Reforms Act 1988. The

company is wholly owned by the State Government and is in the

business of procurement, supply and distribution of electricity in

Andhra Pradesh. Its distribution network is spread across eight

districts in the state, through which the company meets the power

requirements of more than eight million consumers.

After the bifurcation of the state, the company has been renamed

as Southern Power Distribution Company of Telangana Ltd

(TSSPDCL) and continues to operate with truncated operations in

the districts of Hyderabad, Mehboobnagar, Ranga Reddy,

Nalgonda and Medak.

1.2 Financial Performance

The financial statements of TSSPDCL are given in Annexure 1.

During the financial year ended 31st March 2013, TSSPDCL has

incurred a loss of Rs.7718 crores, due to which its net worth has

been completely eroded.

Based on the provisional comments made by the Comptroller and

Auditor General (C & AG) under section 619(4) of the Companies

Act 1956, the annual accounts for the Financial Year 2012-13

have been revised and approved by the Board. This revision has

resulted in the power purchase cost and trade payables being


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increased by Rs.881 crores, respectively. Further, a provision has

been created towards receivables from Govt for additional power

subsidy of Rs.3878 crores. A provision for inventories has been

created for Rs.9 crores while the provision for receivables towards

Indiramma Scheme has been reversed by Rs.11 crores. The

above revisions have resulted in an increase in the net loss by

Rs.4931 crores and changes in assets and liabilities as described

above. The summary of financials is in Annexure 1.

1.3 Employee Profile

The employee profile of TSSPDCL is given in Table 1 below. It is

observed that the current employee strength is 14379 against a

sanctioned strength of 19507, indicating a shortfall in filling up

positions. In particular, the field staff strength is much below

sanctioned strength.

Table 1

SANCTIONED STRENGTH AND MEN IN POSITION .

S. No. Name of the Post Sanctioned

Strength in No. Filled in

No.

1 Chairman & Managing Director 1 1

2 Directors Whole time 5 5

3 Senior Management 24 24

4 Engineering Executives 1590 1518

5 Engineering Non- Executives 793 696

6 Non Technical Executives 184 163

7 Field Establishment/ Non Executive 16910 11972

TOTAL 19507 14379

2. Corporate Governance Policy :

The philosophy of TSSPDCL is to enhance its performance and

emerge stronger by the day to offer its customers the best value for

money.

2.1 Objectives


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TSSPDCL has clearly stated its objectives as given below:

a) To engage in the business of procurement, supply and

distribution of electricity.

b) To acquire, establish construct and operate electrical lines for

the purpose of distribution and supply of electrical energy and

associated sub-stations.

c) To plan, investigate and prepare project reports business

plans and strategy documentation and forecast customer

demand and source purchase of power.

d) To utilize the distribution network and other infrastructure

facilities of the company.

e) To provide continuous quality power supply to consumers.

2.2 Vision

The Company does not have a vision statement.

2.3 Mission

The Company does not have a mission statement.

2.4 Values

The company does not have a values statement.

2.5 Citizen’s Charter

The company does have a citizen’s charter.

2.6 Code of Conduct for Employees

The Company has a code of conduct for the employees.

2.7 Environment, Health & Safety(EHS) Policy

The Company has an EHS policy.

2.8 Quality Policy


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There is a quality control wing in operation that is checking

adherence to the standards laid down by the regulator.

2.9 Corporate Governance Code

The Company does not have a stated Corporate Governance

code.

3. Board Structure :

3.1 Composition of the Board

The Board consists of seven directors including the Chairman &

Managing Director. There are four whole time directors and two

non whole time directors. The whole time directors have been

appointed from the various functions such as finance, HR,

commercial, projects and operations. All the directors are

nominated by the State Govt. in accordance with the guidelines.

The list of the directors as on 12th May 2014, is given in table 2

below.

Table 2

List of the Directors as on 12th

May 2014

S.No. Name Designation

1 Sri.S. A. M. Rizvi IAS Chairman & Managing Director

2 Sri.C.Srinivasa Rao IRAS Director Finance & P&MM

3 Sri.G. Raghuma Reddy Director Commercial & RAC

4 Sri.T.Srinivas Director Projects & HRD

5 Sri.K. M. Nagender Director Operations

6 Sri. S. Subrahmanyam Non Whole time Director –

Ex- officio

7 Sri.A.Sudhakar Non Whole time Director

Ex-officio

An analysis of the composition of the Board for the two year

period from April 2011 to March 2013, shows that a total of 21

directors were in office with the Corporation at various points of

time. Further the analysis showed that during the three year

period from April 2010 to March 2013, six directors were inducted


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and eleven directors have relinquished office, as a result of which

some of the directors could not have completed even two years.

The table 3 below gives the tenure of the Chairman and Managing

Director for the period February 2010 to June 2013. It is observed

that the Chairman and Managing Director have been replaced

thrice, in this period.

Table 3

Tenure of Chairman and Managing Director (2010 till date)

Sl. No.

Name Date of Joining

Date of Separation

Tenure in

months 1. Mr. M. T Krishna Babu 14th Feb

2010 16th July 2011

17

2. Mr G. Ananth Ramu 16th July 2011

21st Jan 2013

18

3. Mr. V. Anil Kumar 22nd January 2013

30th June 2013

5

4. Mr. S. A.M. Rizvi 30th June 2013

Till date -

From the above analysis of the tenure of the directors, Chairman

& Managing Director, frequent changes in directorships have

affected the continuity of leadership due to frequent changes. This

also dilutes the accountability of the top management to the

Board, which is important particularly in the context of TSSPDCL

which is currently executing projects worth Rs 829.30 crores.

3.2 Independent Directors

There are no Independent Directors on the Board.

3.3 Appointment of Company Secretary & Duties

TSSPDCL has a full time Company Secretary looking after legal

and secretarial matters.

4. Board Processes :

4.1 Frequency of Meetings


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The frequency of conducting the Board meetings during the period

April 2010 to February 2014 is given in table 4 below. The

company has complied with the statutory requirement of holding

the Board meeting once a quarter. However, from an analysis of

the period between two meetings shows that Board meetings

have been held monthly and even twice a month in some cases.

This indicates that probably the Board needs to delegate its

powers.

Table 4

List of Board Meetings in 2010-11

S. No. Board Meeting No Date Gap in Months

1 86 09/04/2010

2 87 29/06/2010 2 3 88 19/07/2010 1 4 89 23/08/2010 1 5 90 14/09/2010 1

6 91 03/12/2010 2 7 92 29/01/2011 1

8 93 01/03/2011 2



1 94 16/04/2011 1

2 95 16/06/2011 2

3 96 21/07/2011 1

4 97 29/08/2011 1

5 98 28/09/2011 1

6 99 16/11/2011 2

7 100 25/01/2012 2

8 101 26/03/2012 2


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1 102 27/06/2012 3

2 103 06/08/2012 2

3 104 28/09/2012 1

4 105 21/11/2012 2

5 106 11/01/2013 2

List of Board Meetings 2013-14


1 107 24/05/2013 4

2 108 28/09/2013 4

3 109 16/11/2013 2

4 110 19/12/2013 1

5 111 23/12/2013 0

6 112 16/01/2014 1

7 113 28/01/2014 0

8 114 19/02/2014 1

4.2 Attendance of Directors

A summarized attendance of the Board members at the meetings

is given in Table 5. A study of the participation of the Directors of

the Board in the meetings reveals that although most of the

directors have attended the meetings, there are a couple of ex-

officio directors who have been consistently absent. There have

also been instances of some directors being able to attend only a

single meeting during their entire period of directorship. The

maximum number of meetings at which a director has been

continuously present is eight.


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Table 5

Details of Attendance of Directors 2010-11

Meeting No.

Date Directors Attended

Directors Absent

Total

86 09/04/2010 8 2 10

87 29/06/2010 9 1 10 88 19/07/2010 10 0 10 89 23/08/2010 10 0 10

90 14/09/2010 9 1 10 91 03/12/2010 10 0 10

92 20/01/2010 10 0 10 93 01/03/2011 10 0 10


Meeting No.


Directors Absent

Total

94 16/04/2011 10 2 12 95 16/06/2011 8 2 10

96 21/06/2011 7 1 8 97 29/08/2011 9 1 10 98 28/09/2011 9 1 10 99 16/11/2011 8 1 9 100 25/01/2012 8 1 9

101 26/03/2012 6 2 8


Meeting No.


Directors Absent

Total

102 27/06/2012 7 1 8 103 06/08/2012 6 2 8 104 28/09/2012 6 1 7

105 21/11/2012 5 2 7 106 11/01/2013 6 1 7


Meeting No.


Directors Absent

Total

107 24/05/2013 4 3 7

108 28/09/2013 5 3 8 109 16/11/2013 6 1 7

110 19/12/2013 5 2 7 111 23/12/2013 5 2 7

112 16/01/2014 5 2 7

113 28/01/2014 7 1 8 114 19/02/2014 6 1 7


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4.3 Agenda of Board Meetings

Items Discussed

A list of the items discussed in the Board meetings, is given in

Annexure 2.

Action Taken Report

Based on an examination of the Board minutes, it is observed that

the action taken report has been reviewed in all Board meetings.

Review of Legal Compliances

The Board reviews the legal compliances at frequent intervals.

Review of Operations

Based on a review of the items transacted it is observed that the

Board regularly reviews the operating results at every Board

meeting.

Appointment of Auditors

The appointment of auditors is discussed at the Board meetings

and the auditors are appointed on the basis of the

recommendations by the Board.

A study of the agenda items placed before the Board reveals that

the operations and employee related issues were most frequently

discussed. Within the operations related issues, the progress of

work done on the projects was discussed most frequently. In

particular, issues related to expediting the projects and

procurement of equipment received maximum attention. It is

observed that matters related to projects were also discussed with

the project engineers. The project delays have also been

discussed and during the course of reviewing the project status,

responsibility for project completion was assigned to the


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concerned executives with accountability. In one meeting, to

expedite the completion of the project, the Board has sanctioned

the procurement of high value machinery, in anticipation of Govt.

approval. The Board has also approved the project cost overruns

upto certain limits.

To summarise, the major items of discussion at the Board

meetings have been:

� Progress of projects

� Operational Performance

� Procurement of substation and distribution equipments

Based on the minutes of the Board meeting, it was observed

that the business plan and long term strategy of the company

are not included as agenda items. The financial performance of

the company is also not part of the agenda.

5. Board Committees :

5.1 Constitution of Audit Committee

An Audit Committee has been formed as a subcommittee

functioning of the Board.

5.2 Composition of Audit Committee

The Audit Committee has been recently reconstituted and the

members are listed below in Table 6:

Table 6

List of Audit Committee members

Name of the member Appointment date Role

Sri. K. Ranganatham 9th July 2010 Chairman

Sri. C..Chenna Reddy 31st March 2008 Member

Sri. K. Venkata Narayana 17th July 2011 Member


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5.3 Director Attendance

The table 7 below gives the director attendance at the audit

committee meetings. It is observed that the directors have been

regular in attending meetings.

Table 7

Details of Attendance of Directors – Audit Committee

Sl.

No

Date Directors

Present

Directors

Absent

Total

1 27th May 2010 2 1 3

2 19th July 2010 3 0 3

3 14th September 2010 2 1 3

4 23rd December 2010 3 0 3

5 29th March 2011 3 0 3

6 21st July 2011 2 1 3

7 16th September 2011 3 0 3

8 19th December 2011 3 0 3

9 24th March 2012 3 0 3

10 02nd June 2012 3 0 3

11 01st August 2012 3 0 3

12 28th September 2012 3 0 3

13 22nd December 2012 2 1 3

14 20th March 2013 2 1 3

15 30th September 2013 2 1 3

16 16th November 2013 2 1 3

17 23rd December 2013 2 1 3

18 26th February 2014 3 0 3

5.4 Audit Committee Meeting - Agenda

Number of Items transacted

The Table below gives the number of items transacted at the

Audit Committee meetings. It is observed that an adequate

number of items are being discussed and the time allotted seems

reasonable.


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Action Taken Report

The Table 8 below gives the status on action taken report and

shows that in some meetings this has not been discussed and

therefore can be improved upon.

Nature of Items transacted

The Audit committee has discussed the following items:

� Review of annual accounts;

� Review of reports prepared by internal auditors;

� Review of high tension consumer billing court cases;

� Review of statutory payments & filing of returns;

� Appointment of cost auditor.

Table 8

List of items transacted at audit committee meetings

S.No Date No. of items transacted

Action Taken Report

1 27th May 2010 2 Yes

2 19th July 2010 2 Yes

3 14th Sept 2010 2 Yes

4 23rd December 2010 4 Yes

5 29th March 2011 10 Yes

6 21st July 2011 3 No

7 16th Sept 2011 2 No

8 19th December 2011 4 Yes


10 02nd June 2012 4 Yes

11 01st August 2012 2 No

12 28th Sept 2012 3 No

13 22nd Dec 2012 4 No


15 30th Sept 2013 5 Yes

16 16th November 2013 2 No

17 23rd December 2013 3 Yes

18 26th February 2014 4 Yes


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6. Process Enablers

6.1 Organization Structure

The Company has a well-designed organization structure

separately for the corporate office at Hyderabad, zonal offices and

the field units. The Chairman and Managing Director (CMD) has

been a combined post, since inception. The executive directors on

the Board represent the following functions - Operations,

Commercial, Projects and IT, Finance and HRD. The Executive

Directors are assisted by Chief General Managers, General

Managers and Senior Managers in charge of the zones and the

project offices.

6.2 Delegation of Powers

A delegation of powers document, has been developed with the

sanctioning authority and powers being clearly stated.

6.3 Process Manuals

The company has prepared detailed process manuals for its

business processes and also ERP enabled its processes.

6.4 Internal Controls

Internal Audit Observations

Internal audit in TSSPDCL is conducted by the internal audit cell

and firms of Chartered Accountants appointed by the

management.

As per the comments made by the statutory auditors, the scope of

internal audit of the Company requires further strength in terms of

periodicity and coverage commensurate with the size and nature

of the business. The auditor has also recommended that an

information systems audit needs to be done.

An examination of the internal audit report submitted by the firm of

chartered accountants, based on an upcountry visit to a unit of

TSSPDCL shows the following comments have been made:


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� Staff payments have been made without requisite

documents.

� Manual record keeping and non-physical verification of

inventory and fixed assets.

� Monitoring of the project site operations by the Head Office

was satisfactory as frequent visits were made by the senior

management.

A scrutiny of reports on observations made by Internal, Statutory

auditors & CAG reveal certain procedural deviations in the

recording of financial transactions. Certain observations have

been made by the Statutory Auditors in the Annual Report 2012-

13. These indicate that certain accounting policies are not in

conformity with the accepted accounting standards. These

observations relate to:

� Physical verification of tangible assets.

� Maintenance of separate accounts for assets created from

Govt. grants and consumer contributions, due to which the

depreciation could not been provided in accordance with AS-

6 and AS-10.

� Revenue recognition on disconnected meters.

� Actuarial valuation for determination of the provision for

employee benefits.

� Inventory valuation.

� Recognition of interest on electricity duty.

� Delayed payments of PF contribution.

7. Transparency & Disclosure

7.1 Annual Report

Adequate disclosures have been made in the Annual Report in

accordance with the legal requirements.

7.2 Director Identification Number (DIN)

DIN has been obtained by all directors.


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7.3 Disclosure of Interest by Directors

The disclosure of interest document has been signed by directors.

7.4 Related Party Transactions

There are no related party transactions with companies in which

the directors are interested and this has been specifically stated in

the Annual Report.

7.5 Website Information

TSSPDCL has a web site through which the company

disseminates information on its activities to its stakeholders. The

Annual Reports for the last years are available on the website.

The information disclosed on the website is adequate.


SURVEY REPORT

Annexure 1

BALANCE SHEET AS ON 31st MARCH

2012 2013

I. EQUITY & LIABILITIES Rs. Lakhs

1 Shareholders' funds

a) Share capital 72847.96 72847.96

b) Reserves & surplus 147282.88 -603829.78

2 Non-current Liabilities

a) Long term borrowings 264870.28 277159.86

b) Other long term liabilities 14240.31 15729.96

c) Long term provisions 30425.68 34111.06

3 Current Liabilities

a) Short term borrowings 426557.96 458390.98

b) Trade payables 500332.18 616864.45

c) Other current liabilities 212151.25 332479.36

d) Short term provisions 13406.81 14441.53

TOTAL 1682115.29 1218195.39

II. ASSETS

1 Non current Assets

a) Fixed assets

i) Tangible assets 366967.26 412917.79

ii) Intangible assets 386.95 1253.09

iii) Capital work in progress 74120.02 82929.64

iv) Intangible assets under development

b) Non-current investments 17717.67 27677.67

c) Deferred tax assets (net) 6162.10 16626.97

d) Long term loans & advances 5209.65 4139.72

e) Other non- current assets 595.86 676.86

2 Current Assets

a) Inventories 20970.70 21922.03

b) Trade receivables 112997.15 143719.16

c) Cash and cash equivalents 12784.97 23393.33

d) Short term loans & advances 534612.49 6265.18

e) Other current assets 529590.45 476673.95

TOTAL 1682115.29 1218195.39


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Annexure 1 Contd.

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH

2012 2013

INCOME Rs. lakhs

Revenue from operations 1499645.47 1567721.75

Less: Electricity Duty Paid (13373.53) (9543.41)

Net Revenue from Operations 1486271.94 1558178.34

Other income 26947.01 31632.67

Total Revenue 1513218.95 1589811.01

EXPENSES

Power Purchase Expense 1267567.43 1523530.53

Employee benefits expense 83051.72 76614.89

Operation and Other Expenses 27544.30 34025.93

Finance costs 93550.20 118164.23

Depreciation& amortization expense 39035.32 45279.02

Total Expenses 1510748.96 1797614.60

Profit before exceptional and

extraordinary items and tax 2469.99 (207803.59)

Exceptional items 1677.33 574490.24

Profit / (Loss) before tax 792.66 (782293.84)

Tax expense

1) Current tax 127.70 0.00

2) Deferred tax (260.13) 10464.86

Profit/ (Loss) for the year 404.83 (771828.97)


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Annexure 2

LIST OF MAJOR ITEMS TRANSACTED IN BOARD MEETINGS

1 Routine Business

Confirmation of minutes of the previous Board meeting

Action taken report of the previous Board Meetings

2 Reconstitution of the Board

Appointment of directors, Resignation of Directors

Reconstitution of Audit Committee

3 Operations

Revision of delegation of powers on certain issues to Directors and Chairman and Managing Director


4 Financial

Approval of the issue of Bonds to APTRANSCO AND APGENCO under FRP Scheme.

Financial assistance to the extent of Rs.4913.02 lakhs from Rural Electrification Corporation Limited

5 Capex

Project completion

Procurement of Machinery

6 Legal Compliance

Review of legal compliances

7 Employee Remuneration

Consideration of adoption of orders issued by the Govt. with reference to employee remuneration


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Survey Report 2

TRANSMISSION CORPORATION OF ANDHRA PRADESH LIMITED

(APTRANSCO)

1. Company Profile:

1.1 Incorporation

Transmission Corporation of Andhra Pradesh, (APTRANSCO) is a

wholly owned company of Government of Andhra Pradesh

(GoAP) with operations in Andhra Pradesh (AP) and is engaged in

the transmission of power within the State. The Company was

incorporated under Companies Act, 1956, as a sequel to the AP

Electricity Reforms Act in 1998. APTRANSCO was also notified

as a State Transmission Utility (STU) under Electricity Act, 2003

and is the nodal agency at the state level for transmission related

activities.

APTRANSCO was further unbundled with effect from 1st April

2000 into one "Transmission Corporation" and four "Distribution

Companies" (DISCOMS). APTRANSCO which was initially

engaged in the bulk purchase, transmission and distribution of

power has been reorganized as a transmission company only,

with bulk purchase and transmission of power with effect from

June 9, 2005. The distribution is now with the DISCOMs.

After the bifurcation of the State, APTRANSCO continues to retain

its legal identity but with truncated operations, in the state of

Andhra Pradesh.


The financial statements of APTRANSCO are given in Annexure

1. During the financial year ended 31st March 2013, the revenue

from transmission and SLDC charges increased to Rs 1497

crores, from Rs 1262 crores in the previous year, registering a

growth of 18.6 %. In the same period, the profit after tax increased


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from Rs 259 crores to Rs 417 crores, recording a growth of 61%.

The assets of the company during the same period increased

from Rs 6240 crores to Rs 7416 crores. Although the profitability

also increased from 4.2% to 5.6%, the return capital employed, is

much less than the market rate. The summary of financials are in

Annexure 1.


The employee profile of APTRANSCO is given in Table 1 below. It

is observed that the current employee strength is only 4049 as

against a sanctioned strength of 8419, indicating a major shortfall

in filling up positions. In particular, the field staff strength is much

below sanctioned strength are critical areas such as operations

and maintenance. This shortage of staff could affect the customer

service levels.

Table 1

SANCTIONED STRENGTH AND MEN IN POSITION

S. No Breakup Sanctioned Filled Vacant

1 Engineering Service 3427 2629 798

2 P&G Service 796 437 359

3 Accounts Service 781 394 387

4 Vigilance & Security 73 7 66

5 Operations & Maintenance Service

3342 582 2760

Total Strength 8419 4049 4370

2 Constituents of Corporate Governance :

2.1 Objectives

The company was set up with the following objective:

• “Purchase power from various generators and sell it to

distribution companies”.


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2.2 Vision

The Company has the following vision statement:

“To Plan, Construct and Maintain the Transmission Network in

State of Andhra Pradesh in line with Demand Growth and

Generation Expansion in an efficient manner so as to ensure

highest availability and lowest operational costs.”

2.3 Mission

The Company has the following mission statement:

“To be recognized and respected as one of the best transmission

utilities and to set the bench-marks in every parameter of

operation for others to follow.”

2.4 Values

The company has stated the following core values:

� Customer Centric Operations

� Team Work

� Accountability

� Integrity

� Social Responsibility


The Company has a citizen’s charter which has details on items

like quality standards, future proposals etc.


The Company has adopted the Andhra Pradesh State Electricity

Board Employee’s (Revised) Conduct Regulations as the code of

conduct for its employees as well.

2.7 Environment, Health & Safety Policy (EHS)

The Company does not have a stated EHS policy.


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2.8 Quality Policy

There is no stated quality policy, however there is a supply code

that has been specified by the regulator.

2.9 Corporate Governance Code:

The Company does not have a stated Corporate Governance

code.

3 Board Structure :


The Table 2 below gives the list of directors as on 30th November

2013. From the list it is observed that the positions of Chairman

and Managing Director are combined and the majority of directors

are whole time. These whole time directors are drawn from the

functional areas and operations like grid transmission and

projects. There are two non whole time, ex-officio directors, one

from the Energy Dept and one from the Finance Dept.

The analysis of the profile of the directors reveals that the whole

time directors represent the functions and the operational areas of

the business. The non whole time directors represent the

respective administrative Departments such as – Energy and

Finance. These positions would be necessary to develop the

required linkages with the Government and facilitate the

necessary approval. Although the Board has sufficient functional

expertise, it needs to strengthen domain expertise for

identification of growth opportunities and formulating strategic

plans.


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Table 2

LIST OF DIRECTORS (as on 30th Nov 2013)

S.No. Name Designation

1 Mr. Suresh Chanda Chairman & Managing

Director

2 Mr. P Ramesh Joint Managing Director

(Commercial &HRD)

3 Mr. Y Nagi Reddy Joint Managing Director

(Vigilance and Security)

4 Mr. G Ramakrishna Reddy Director (Finance)

5 Mr. Mohd. Anwaruddin Director (Grid Transmission &

Management)

6 Mr. S Subrahmanyam Director (Projects)

7 Mr. Mrutunjay Sahoo Director (Non Whole time)

8 Dr. P. V Ramesh Director (Non Whole time)


period from April 2011 to March 2013, shows that 4 directors were

appointed to the Board. Further, during the three year period from

April 2010 to March 2013, eight directors have relinquished office.

The total strength of the Board is ten, however, it is observed that

four directors have relinquished office in each year during the

period 2011-12 and 2012-13 and correspondingly four new

directors have been appointed in the same period.

3.2 Tenure of Managing Director

The table 3 below gives the tenure of the Managing Directors of

APTRANSCO for the period 2008 to 2013. It is observed that

during the five year period, the Managing Director has been

changed four times. In fact two Managing Directors have been

replaced in 13-14 months, indicating that there is no continuity of

leadership consequently the accountability of top management to

the Board is diluted.

Table 3


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Tenure of Managing Director

Sl.

No.

Name of the

Managing Director

Date of

Joining

Date of

Separation

Tenure

in Months

1. Mr. Sutirtha Bhattacharya 31-10-2008 02-01-2010 14

2. Mr. Ajay Jain 02-01-2010 18-05-2012 29

3. Mr. Hiralal Samariya 18-05-2012 04-07-2013 13

4. Mr. Suresh Chanda 05-07-2013 Till date






The company has a full time Company Secretary looking after

legal and secretarial matters.

4 Board Processes :


The dates on which the Board meetings have been held during

the period June 2012 to March 2014 is given in Table 4 below. It

is observed that the company has complied with the legal

requirement of holding a meeting once a quarter. It is observed

that in November 2013, two meetings have been held due to the

resignation of the Chairman of the Audit Committee.

Table 4


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FREQUENCY OF BOARD MEETINGS


1 90 15/06/2012

2 91 28/09/2012 3

3 92 29/12/2012 3

4 93 14/03/2013 2.5

5 94 26/06/2013 3

6 95 16/09/2013 2.5

7 96 12/11/2013 2

8 97 30/11/2013 1

9 98 07/03/2014 3


The details of directors attendance is given in table 5 below. It is

observed that most of the directors are present at the meetings.

Table 5

DETAILS OF ATTENDANCE OF DIRECTORS 2011-12

Board

Meeting No

Date No. of Directors

Attended

No. of Directors

Absent

86 28/6/2011 9 1

87 19/9/2011 10 0

88 28/12/2011 8 1

89 24/3/2012 6 3


Board

Meeting No


Attended

No. of Directors

Absent

90 15/06/2012 9 0

91 28/09/2012 8 2

92 29/12/2012 8 2

93 14/03/2013 6 3



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Board

Meeting No


Attended

No. of Directors

Absent

94 26/06/2013 8 1

95 16/09/2013 5 3

96 12/11/2013 7 1

97 30/11/2013 7 1

98 07/03/2014 7 1


Number of items transacted

Please see Annexure 2 for a list of the items discussed in the

Board meetings.

From an analysis of the issues discussed at the Board Meetings it

is observed that matters relating to financial performance, project

execution and manpower planning are being discussed.

Action Taken Report

The Action Taken Report is discussed at all the Board Meetings.


The appointment of auditors is discussed at the Board meetings

and the auditors are appointed on the basis of the

recommendations by the Board.




The Board regularly reviews the operating results at every Board

meeting.

Review of financials

The Board reviews the financial performance and the key

performance indicators that have been identified.


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Business Plan

Based on the review of the minutes of the Board meeting, it was

observed that the business plan and strategy of the company are

not items on the agenda.

5 Board Committees :

5.1 Audit Committee

There is an Audit Committee functioning within the Board.


The Board has constituted an audit committee, the list of

members of the audit committee as on 7th March 2014, is given in

table 6 below. It is observed that the committee comprises of

three directors of which one is whole time and two are non whole

time directors.

Table 6

LIST OF THE AUDIT COMMITTEE MEMBERS

Name of the Member Appointment Date Role

Mr. Mrutunjay Sahoo 29th December 2012 Member

Mr. P.V.Ramesh 30th November 2013 Member

Mr. Y. Nagi Reddy 26th June 2013 Member

5.3 Audit Committee Meetings - Attendance

The attendance of the members of the Audit Committee is given in

Table 7 below. It is seen that in most of the meetings, one

director has been absent, in only three meetings all the members

have been present at the meeting.

Table 7


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ATTENDANCE OF DIRECTORS IN AUDIT COMMITTEE MEETINGS

AC Meeting No

Date No. of Directors Attended

No. of Directors Absent

12 23/09/2010 2 1

13 28/06/2011 3 0

14 19/09/2011 3 0

15 15/06/2012 3 0

16 28/09/2012 2 1

17 29/12/2012 2 1

18 26/06/2013 2 1

19 30/11/2013 2 1

20 07/03/2014 2 1

5.4 Audit Committee - Frequency of Meetings

The frequency of meetings for the period September 2010 to

March 2014 is given in Table 8 below. It is observed that the

number of meetings held is in accordance with the mandatory

requirement of approval of half yearly accounts.

Table 8

GAP IN AUDIT COMMITTEE MEETINGS

AC Meeting No Date Gap in months

12 23/09/2010

13 28/06/2011 9

14 19/09/2011 3

15 15/06/2012 9

16 28/09/2012 3

17 29/12/2012 3

18 26/06/2013 6

19 30/11/2013 5

20 07/03/2014 3

5.5 Audit Committee – Agenda for Meetings

The number of items transacted and the action taken report is

given in Table 9 below. It is observed that the number of items

being discussed is reasonable for the allotted time. However, the

action taken report is not being discussed, except at the last

meeting. An examination of the minutes of the meeting reveals

that the Audit Committee has discussed the following items:


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• Review of comments made by statutory auditors, C&AG on

scope of audit, accounting policies and audit observations

• Review of Annual Accounts

• Internal Control System based on internal audit reports

• Appointment of cost auditor

Table 9

AGENDA FOR MEETINGS

AC Meeting No

Date No. of items transacted

Action Taken Report

12 23/09/2010 5 No

13 28/06/2011 6 No

14 19/09/2011 6 No

15 15/06/2012 7 No

16 28/09/2012 7 No

17 29/12/2012 7 No

18 26/06/2013 8 No

19 30/11/2013 6 No

20 07/03/2014 5 Yes

6 Process Enablers :


The company has a well-defined organization Structure.


The company has a detailed document on delegation of powers

for incurring expenditure and appointment of employees.

6.3 Process Manuals

The company has developed standard operating procedures for

its business processes.

6.4 ERP enabled Processes

The company has implemented an ERP Application with six

modules, Material Management, Project Management,


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Maintenance Management, Finance Management, Human

Resource Management and Payroll Management. The application

covers the business functionalities at the Head Quarters, all

Transmission Lines & Sub Stations / TLC wings (up to Divisional

Level) and all the stores departments.



The internal audit has been carried out on the transactions of

APTRANSCO upto the year 2013–14.

Based on the internal audit reports for the last three years certain

areas of non conformance have been identified. Most of these

pertain to procedural deviations with respect to purchase,

capitalization of expenditures and payment of taxes.

The statutory auditors have commented that there are adequate

internal control systems commensurate with the size and nature of

the business with regard to purchase of inventory, fixed assets

and sale of goods/services. Further they have also commented

there is no major weakness in the internal controls.

Certain observations made by statutory auditors and CAG indicate

that the accounting policies followed by the company are not in

accordance with the accepted practice.

The summarized list of observations are given in Table 10 below,

relate to the following areas, some of which have repeatedly

occurred.

Table 10


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OBSERVATIONS MADE BY STATUTORY AUDITORS & CAG

Accounting Policy Deviations

� Actuarial Valuation of Employee Benefits

� Determination of outstanding capital commitments

� Accounting and disclosure of MAT receivable and

subsequent adjustments

� Accounting for deferred tax

Records Maintenance and Updation

� Maintenance of records relating to usage of vehicles

Work in Progress

� Non completion of project works within due date

� Non submission of accounts for completed works.

� Agreements entered into with contractors

� Security deposits collected from contractors

Receivables

� Confirmation of balances

� Recovery of loans and advances from employees

Deposits & Advances

� Settlement of long pending advances

� Payment of service tax on reverse charges

Cash & Bank Balances

� Reconciliation of bank balances as per bank books

Fixed Assets

� Updation of fixed assets register

� Capitalization of major expenditures

7 Transparency & Disclosures

7.1 Annual Report

The annual report has made all relevant disclosures in

conformance with the legal requirements.



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There is no disclosure of interest document signed by the directors.


The related party transactions are not being put up to the Board

for review. No disclosures have been made in the annual report

on related party transactions.


AP Transco has a web site through which the company

disseminates information on its activities to its stakeholders. The

Annual Reports for the last years are available on the website.

The information disclosed on the website is adequate.


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7.5

Annexure 1

Balance Sheet as on 31st March

(Rs. lakhs)

Sl. No 2012 2013

I NET ASSETS :

Gross Block (a) 800003.92 913065.89

Less: Accumulated Depreciation (b) 361060.47 402709.65

Net Fixed Assets (a-b) 438943.45 510356.24

Capital Expenditure in progress 169938.90 170434.15

Investments 10156.67 10717.63

Net Current Assets 4987.22 50186.42

Total Current Assets 253664.09 346615.16

Less : Total Current Liabilities 248676.87 296428.74

NET ASSETS 624026.24 741694.45

II FINANCED BY:

Capital Liabilities 273531.12 290240.44

Deferred Tax Liability 31400.31 30956.17

Funds from State Government 46789.98 57477.78

Equity 77921.76 77921.76 Contributions, Grants and Subsidies towards

cost of Capital Assets 113443.86 128263.68

Reserve and Reserve Funds 8109.61 42802.14

Surplus 72829.59 114032.49

TOTAL FUNDS 624026.24 741694.45


SURVEY REPORT

Annexure 1 Contd.

Profit & Loss Account for the year ended 31st March

(Rs. lakhs)

2012 2013

INCOME

Revenue from Transmission & SLDC Charges 126188.63 149785.17

Other Income 19290.80 22641.28

TOTAL 145479.43 172426.44

EXPENDITURE

Repairs & Maintenance 14934.08 18474.55

Employee Costs 33914.07 37850.67

Administration & General Expenses 5614.68 5284.06

Depreciation and Related expenses (Net) 39549.86 41651.83

Interest and Finance charges 30194.19 36493.38

Less: Expenses Capitalized

Interest and Finance charges capitalized 8297.00 9860.00

Expenses capitalized 9055.23 8917.16

Sub-Total 17352.23 18777.16

Other Debits 63.45 8.56

Net Prior Period Charges / (Credits) 0.00 (185.00)

TOTAL 106918.10 120800.89

Profit / (Loss) Before Tax 38561.33 51625.55

Current Tax (Corporate Tax) 7,715.65 17,193.99

MAT credit availed 0.00 (6,864.88)

Deferred tax 4,867.27 (444.15)

Profit After Tax 25978.41 41740.59


SURVEY REPORT

Annexure 2


1. Routine Business

Grant of leave of absence to the directors

Confirmation of proceedings of previous meeting

Review of Action Taken Report

2. Reconstitution of the Board

3. Project Execution Issues

Status on new projects – adding substations, laying of lines , augmentation of transformer capacity and extending power to lift irrigation schemes

4. Operational Issues

Performance review and plan for next year in terms of operational parameters such as energy handled, peak demand and revenue generated

Sanction of additional posts and transfer of employees

Waiver of transmission charges

5. Financial Issues

Approval of annual accounts

Placement of Inter corporate deposits

6. Legal Compliance Issues

Extension of time for convening Annual General Meeting

Change in shareholders of APTRANSCO

Change in nomination of member of Audit Committee

Approval of Cost Accounting Records

Approval of Directors Report

Implementation of AP revised pension rules and GPF rules

Appointment and Remuneration of Statutory Auditors

Appointment of Cost Auditor


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Survey Report 3

THE SINGARENI COLLIERIES COMPANY LIMITED

(SCCL)

1 Company profile

1.1 Incorporation

The Singareni Collieries Company Limited (SCCL) was

incorporated on 23-12-1920 under the previous Companies Law

SCCL is in the business of coal mining and is jointly owned by the

Government of Telangana and Government of India on a 51:49

equity basis. It is the oldest Govt. Mining Company in the country

having a history of more than 120 years in coal mining. It is

currently operating 15 opencast and 34 underground mines in 4

districts of Telangana. The Company is entering into power

business with the setting up of 2 x 600 MW Power Plant at Jaipur

(V) & (M), Adilabad Dist.With the bifurcation of the state of Andhra

Pradesh the ownership of the company has been changed in the

name of the Govt of Telangana and the share capital of erstwhile

Govt of Andhra Pradesh is now held by the Govt of Telangana

State.


The share capital of SCCL is Rs 1733 crores, as on 31st March

2013. The net sales were Rs 10,128 crores in 2012-13 as against

Rs 9,238 crores in the previous year, recording a growth of

9.63%. The assets increased to Rs 16,023 crores as compared to

Rs 12,677 crores in the previous year. Over the same period, the

profit after tax increased from Rs 358 crores to Rs 401 crores,

recording a growth of 11.12%.However, in the same period, the

profitability declined from 3.30% to 3.25%. The company


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produced 50.47 Million Tonnes of coal in the year 2013-14 as

against 53.19 Million Tonnes in 2012-13 and is a profit making

and dividend paying company. The summarized Financial

statements are given in Annexure 1.


The manpower strength of the company as on 31st March 2014, is

given in table 1 below. It can be observed that there is a

significant shortage of time rated workers as compared to the

sanctioned strength. Staff positions are in excess of sanction and

badly fillers have been recruited.

Table 1

SANCTIONED STRENGTH & FILLED

Sl. No Category Sanctioned Strength

Filled Gap

1 Officers 2411 2378 33

2 Staff 14995 17367 (2372)

3 Time rated workers 44416 37010 7406

4 Piece rated workers 2540 3148 (608)

5 Badli fillers 970 1875 (905)

Total 65332 61778 3554

2 Corporate Governance Philosophy

2.1 Objectives

The company has stated its main objectives as follows:

� To prospect for, explore, open, raise, win, get and quarry

coal, minerals, oils, metals and precious metals or

manufacturing such produce and either free from or in

combination with other substances and to acquire and use

plant for the above purposes or any of them.

� To purchase, take on lease or otherwise acquire any tenure

hold and acquire options in any mines, and to undertake all

or any of the businesses carried on in connection with such


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premises and to undertake and satisfy the liabilities of the

proprieties of the premises so acquired and of the business

or businesses carried on in connection with such premises.

2.2 Vision

The company has a vision statement as follows:

“To produce coal qualitatively and cost effectively in a socially and

environmentally sustainable manner, valued by customers,

employees and the community”.

2.3 Mission

The company has a mission statement as below:

� To retain Strategic role of a premier Coal Producing

Company in the country and excel in a competitive business

environment.

� To strive for Self-reliance by optimum utilization of existing

resources and earn adequate returns on capital employed.

� To exploit the available mining blocks with maximum

conservation and utmost safety by adopting suitable

technologies and practices and constantly upgrading them

against international benchmarks.

� To supply reliable and qualitative coal in adequate quantities

and strive to satisfy customers needs by constantly sharing

their experience and customizing our product.

� To emerge as a model employer and maintain harmonious

industrial relations within the legal and social framework of

the State.

� To emerge as a responsible Company through good

Corporate Governance, by laying emphasis on protection of

environment & ecology and with due regard for corporate

social obligations.



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There is no stated citizen’s charter.

2.5 Code of conduct for employees

The company has adopted a code of conduct for the employees.

2.6 EHS Policy

The company has environment and safety policies. The company

is maintaining well equipped hospitals and providing medical

facilities to the employees and their dependents.

2.7 Quality Policy

The company has stated Quality Policy.


The Companies Act, provisions with respect to Corporate

Governance are followed by the Company.

3. Board Structure


The table 2 below gives the composition of the Board as on 31st

March 2014. Besides Chairman & Managing Director there are

five functional directors representing the various functions and

operations of the company. In addition, there are 2 ex-officio

directors nominated by Energy Department, Govt. of Telangana

and 2 from the Ministry of Coal, Government of India. The

Chairman & Managing Director is also an ex-officio Board

Director.

Table 2


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COMPOSITION OF BOARD OF DIRECTORS

S.No Name Designation

1 Mr Sutirtha Bhattacharya IAS Chairman & Managing Director

2 Mr S. Vivekanand IRAS Director (Finance)

3 Mr B. Ramesh Kumar Director (Operations)

4 Mr T. Vijaya Kumar, IAS Director (Personnel, Administration & Welfare)

5 Mr A. Manohar Rao Director (Planning & Projects)

6 Mr P. Ramesh Babu Director (Electrical & Mechanical)

7 Mr Mruntunjay Sahoo IAS Special Chief Secretary, Energy Dept, Govt of Telangana

8 Dr. P V Ramesh IAS Principal Secretary, Finance Dept, Govt of Telangana

9 Mr D.C.Garg Chairman & Managing Director WCL

10 Mr A.K. Bhalla IAS Joint Secretary Ministry of Coal

11 Mr D.N.Prasad Adviser Projects, Ministry of Coal


period from April 2011 to March 2013, shows that a total of 10

directors were appointed to the Board. Further, during the three

year period from April 2010 to March 2013, 15 directors were

inducted and 18 directors have relinquished office, therefore,


3.2 Tenure of Managing Director and Whole-time Directors

The tenure of Managing Director and Whole time Directors are as

per orders issued by Government of Andhra Pradesh duly

adopted by the Board of Directors. The initial appointment is for a

period of 2 years and is generally extended by another 2 years by

the Govt. of Andhra Pradesh.

From The Table 3 below it is observed that there is continuity of

leadership, wherein Mr. Narsing Rao held the position from 2006

to 2012, which is more than 5 y.ears. Mr. Dinesh Kumar held the

position thereafter less than one month indicates a stop gap

arrangement.

Table 3


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TENURE OF CHAIRMAN & MANAGING DIRECTOR

Sl. No

Name of Director Date of Joining

Date of Separation

Tenure in months

1 Mr. Sutirtha. Bhattacharya 10.5.2012 Till date

2 Mr. Dinesh Kumar 23.4.2012 9.5.2012 1

3 Mr. S.Narsing Rao 18.9.2006 23.4.2012 67




There are no independent directors on the Board of the Company

as on date as the relevant provisions of the act are not applicable

to the company for the present .


SCCL has a full-time qualified Company Secretary to look after

the secretarial matters.

4. Board Processes:


The frequency of conducting the Board meetings during the period

March 2011 to October 2014 is given in table 4 below. The Board

meetings are being held in compliance with the legal requirement

of at least once in a quarter. During the financial years, 2011-12

and 2012-13, five meetings were held but in 2013-14, eight

meetings were held. In fact in 2013-14, two meetings were held in

a quarter from which it can be concluded that additional Board

meetings are being scheduled to consider urgent decisions. the

Board is meeting to approve urgent decisions.

Table 4

FINANCIAL YEAR 2011-12


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Meeting No 502 503 504 505 506

Date 15 Apr 4 Jul 12 Sep 11-Nov 6-Feb

Gap in months

3 2 2 3


Meeting No 507 508 509 510 511

Date 13 Apr 29 Jun 24 Jul 10 Nov 22 Feb

Gap in months 2 2 1 4 3


Meeting No.

512 513 514 515 516 517 518 519

Date 14

May 10 Jun

30 July

11 Sep

30 Oct

21 Dec

7 Mar

27 Mar

Gap in months

3 1 1 2 1 2 3 0


The director attendance at the Board meetings is given in table

5 below. From the table it is seen that most of directors are

present at the meetings, however there are only 2 meetings where

all the directors are present.

Table 5

ATTENDANCE OF DIRECTORS (2011-12)

Meeting No 502 503 504 505 506

Meeting Date 15 Apr 4 Jul 12 Sep 11-Nov 6-Feb

Directors Present 9 8 8 8 9

Directors Absent 0 1 3 2 2 Total 9 9 11 10 11


Meeting No 507 508 509 510 511

Meeting Date 13 Apr 29 Jun 24 Jul 10 Nov 22 Feb

Directors Present 11 9 9 8 8

Directors Absent 0 2 1 2 2

Total 11 11 10 10 10



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Meeting No. 512 513 514 515 516 517 518 519

Meeting Date 14 May

10 Jun

30 July

11 Sep

30 Oct

21 Dec

7 Mar

27 Mar

Directors Present

8 8 9 8 9 10 10 8

Directors Absent

2 3 2 3 1 1 1 3

Total 10 11 11 11 10 11 11 11

4.3 Agenda

A selective list of the agenda items for the Board meetings is

given in Annexure 2. In some meetings nearly 50 items are being

discussed However some of the issues are for information /

appraisal of the Board.

4.4 Agenda – Action Taken Report

The Action Taken Report has been discussed and taken on

record at all the Board meetings.

4.5 Agenda – Review of Operations

A review of the operations, in terms of operational indicators is

discussed in every meeting.

4.6 Agenda – Review of financials

The quarterly financial performance is reviewed at every meeting.

4.7 Agenda – Approval of Business Plan

Business plans are presented to Board of directors for their

approval.

4.8 Agenda – Review of Legal Compliances

A review of the legal compliance is being done by the Board.

4.9 Agenda – Appointment of Auditors

The Comptroller and Auditor General of India appoints the

statutory auditors of the company under section 619(2) of the


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Companies Act 1956. The remuneration payable to the auditors

is fixed by the shareholders in the Annual General Meeting.

5. Board Committees:

The Board has constituted an Audit committee as per the requirements

of the Companies Act, 1956.

5.1 Audit Committee - Composition

The Audit Committee is comprised of five members list given in

table 6 below, who are all non-executive directors, however, these

are all ex-officio positions.

Table 6

COMPOSITION OF AUDIT COMMITTEE

S.No. Member Designation

1 Mr V. Bhaskar Spl. Chief Secretary, Finance Dept. Govt. of A.P.

2 Mr. Mrutunjay Sahoo Spl. Chief Secretary, Energy Dept. Govt. of A.P.

3 Mr. A.K.Bhalla, Joint Secretary, Ministry of Coal, Govt. of India,

4 Mr. D.C. Garg, Chairman-cum-Managing Director, Western Coalfields Ltd.,

5 Mr. D.N.Prasad, Advisor (Projects), Ministry of Coal, Govt. of India.

5.2 Audit Committee - Frequency of Meetings

From the table 7 below it is observed that the frequency of the

audit committee meetings is in accordance with the mandate

under the Companies Act, 1956. It is observed that in financial

year 2011-12, only 2 meetings was held.

Table 7

FREQUENCY OF AUDIT COMMITTEE MEETINGS

S.No. AC Meeting No Date Gap in Months


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1 19 16/07/2010

2 20 01/11/2010 4

3 21 04/07/2011 8

4 22 06/02/2012 7

5 23 29/06/2012 4

6 24 24/07/2012 1

7 25 14/05/2013 10

8 26 30/07/2013 2

5.3 Audit Committee - Director Attendance

The Table 8 below gives the attendance of the directors at the

audit committee meetings. It is observed that most of the directors

are present at the meetings.

Table 8

ATTENDANCE AT AUDIT COMMITTEE MEETINGS

Sl.

No.

AC

Meeting

No

Date Invitees Members

present

Members

Absent Total

1 19 16/07/2010 7 2 3 5

2 20 01/11/2010 9 2 3 5

3 21 04/07/2011 9 2 3 5

4 22 06/02/2012 9 3 2 5

5 23 29/06/2012 7 3 2 5

6 24 24/07/2012 10 3 2 5

7 25 14/05/2013 9 3 2 5

8 26 30/07/2013 10 3 2 5

5.4 Audit Committee Agenda – Action Taken Report

Action taken reports are submitted and reviewed at all the audit

Committee Meetings and those points which are not closed due

to non fulfillment of Action Taken Reports are carried over to

future meetings for review.

5.5 Audit Committee Agenda – No of Items Transacted

The table 9 below gives the number of items discussed at the

audit committee meetings. In most meetings the number of items

discussed is optimum but in two meetings nearly 20 items were


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discussed, which seem to indicate that probably these items

were urgent attention and hence they had to be completed in one

meeting.

Table 9

Items transacted in Audit Committee Meetings

S.No. AC Meeting

No Date No of Items Transacted

1 19 16/07/2010 7

2 20 01/11/2010 17

3 21 04/07/2011 7

4 22 06/02/2012 13

5 23 29/06/2012 4

6 24 24/07/2012 6

7 25 14/05/2013 20

8 26 30/07/2013 12

5.6 Audit Committee Agenda – Internal Audit Reports

The Audit Committee reviews the Internal Audit Reports submitted

by the internal auditors in every meeting and recommends

corrective action for implementation.

5.7 Audit Committee Agenda – Half-Yearly/ Annual Accounts

The Audit Committee Agenda essentially covers review of the

Half- Yearly/ Annual Accounts.

5.8 Audit Committee Agenda – Business Plan

The Audit Committee Agenda covers review of the Business

Plans.

5.9 Audit Committee Agenda – Accounting Policy

The Audit Committee reviews the Accounting Policies.

5.10 Audit Committee Agenda – Risk Coverage of Assets

The Audit Committee agenda covers Risk Coverage of assets.


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6 Process Enablers

6.1 Organisation Structure

A well defined organisation chart of the company has been

prepared and is comprehensive in terms of positions and

functions.


The delegation of powers from Board of Directors to Chairman

and Managing Director and Whole time Directors has been

prepared. The delegation of powers is in respect of monetary

transactions and employment.

6.3 Process Manuals:

Process manuals have been developed for sales, procurement,

materials management, HRD and accounting functions. These

processes are all ERP enabled. SCCL uses the latest coal mining

technologies in opencast and underground mines, equipment

maintenance and coal handling. A GPS based surveillance

system for monitoring trucks is under implementation.


As per the Statutory Audit Reports, the company has adequate

internal control procedures commensurate with the size of the

company and the nature of business for the purchase of inventory,

fixed assets and sale of goods and services.


All transactions of the company are subject to pre and post audit

scrutiny.

However, as per vigilance reports during the year 2012-13, frauds

aggregating to Rs.34.92 lakhs have been reported, pertaining to

pilferage of coal and other material based on discussions with the

concerned officials.


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The table 10 below lists a few internal audit observations made by

the internal audit department and Statutory Auditors.

Table 10

Observations Made By Auditors

� Recovery of disallowed amounts under pre and post audits.

� Overstatement of profit due to under provision in mine closure provision

Accounting Policies related to Provisions

� Contingent Liability of Rs.312.22 crores towards reimbursement of estimated service tax liability of its contractors.


� Funds raised on short term basis have, prima facie, been used during the period for long term investment to the extent of Rs.433.21 crores.

7 Transparency & Disclosure

7.1 Annual Report

The Annual Reports contain the prescribed information as regards

its financials including Directors’ Report, Notice of Annual General

Meetings, Auditors’ Reports and Management’s responses to the

queries raised by the statutory auditors, C&AG.

7.2 Cost Audit Compliance

The company has complied with the cost audit requirements and

maintenance of the prescribed records as specified in the (Cost

Accounting records) Rules 2011.

7.3 Related Party Disclosures

Related party disclosures are separately stated in the Annual

Report.



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The website contains information about the business of the

company, its management, annual reports, and information to

various stakeholders.


SURVEY REPORT

Annexure 1


Rs. crores

Sl.No. 2012 2013

I. EQUITY & LIABILITIES

1 Shareholders' Funds

a) Share capital 1733.20 1733.20

b) Reserves & surplus 1399.55 3132.75 1699.30 3432.50

2 Non-current Liabilities


b) Other long term liabilities 283.31 92.64

c) Long term provisions 5920.75 6820.67 8147.35 9268.47

3 Current Liabilities


b) Trade payables 309.57 594.45


d) Short term provisions 525.74 2723.48 646.13 3322.65

TOTAL 12676.90 16023.62

II. ASSETS

1 Non Current Assets

a) Fixed assets

i) Tangible assets 3134.31 3274.70

ii) Intangible assets 351.75 304.54

iii) Capital work in progress 320.55 1603.42

iv) Intangible assets under development

298.64 538.94

b) Non-current investments 23.13 1022.80

c) Deferred tax assets (net) 1773.30 2491.31

d) Long term loans & advances 1038.40 6940.08 885.13 10120.84

2 Current Assets

a) Inventories 575.97 671.43


c) Cash and cash equivalents 3711.67 3262.40

d) Short term loans & advances 308.42 359.30

e) Other current assets 338.17 5736.82 384.47 5902.78

TOTAL 12676.90 16023.62


SURVEY REPORT

Annexure 1 Contd.

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31st MARCH

Rs. crores

2012 2013

INCOME


Other income 494.32 572.87

TOTAL 9816.55 10804.62

EXPENSES

Cost of materials consumed 1622.86 1708.78

Changes in inventories (115.35) (26.81)

Employees benefits expenses- Salaries/Wages 4088.62 4313.03

Power & fuel 249.90 449.12

Repairs & maintenance 78.10 94.98

Contractual Expenses 918.99 746.77

Finance costs 34.46 45.38


Provisions & write-offs 60.72 15.46

Other expenses 102.68 127.42

Voluntary retirement compensation 0.01

Over burden adjustment 496.31 1132.17

Provision for back filling 1192.12 1078.30

Provision for mine closure 59.39 62.36

TOTAL 9247.59 10246.08

Profit before exceptional and extraordinary items and tax

568.96 558.54

Exceptional items (net) 6.02 17.23

Profit before extraordinary items and tax 562.94 541.31

Tax expense

Current tax 972.86 863.64

Deferred tax (742.25) (718.01)

Earlier years taxes (25.93) (5.46)

Profit for the year 358.26 401.14


SURVEY REPORT

Annexure 2

ISSUES DISCUSSED AT THE BOARD MEETINGS

Board Meeting No

502 503 504 505 506 507 508 509 510 511 512 513 514 515 516 517 518 519

Total Items Transacted

12 32 18 39 35 47 22 17 33 37 49 27 35 22 30 26 40 7

Routine Business

2 3 3 4 5 3 4 3 6 2 2 4 6 2 5 4 3 2

Reconstitution of the Board

1 3 2 2 2 2 2 2 1

Operations 6 8 9 17 22 23 5 8 19 12 20 12 19 12 19 12 12 1

Financial 1 2 1 1 3 2 2 3 2 1 1 1 2 5

Capex 2 11 6 5 16 6 3 2 7 4 5 6 2 4 15 3

Legal Compliance

1 7 3 4 2 1 2 1 6 8 1 6 2 2 1 2

Employee 7 3 4 2 5 2 2 3 1 3 3

Total 12 32 18 39 35 47 22 17 33 37 49 27 35 22 30 26 40 7


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Annexure 3

ITEMS TRANSACTED IN BOARD MEETINGS

Sl. No. Meeting No Date No of Items Transacted

1 502 15/04/2011 12

2 503 04/07/2011 32

3 504 12/09/2011 18

4 505 11/11/2011 39

5 506 06/02/2012 35

6 507 13/04/1012 47

7 508 29/06/2012 22

8 509 24/07/2012 17

9 510 10/11/2012 33

10 511 22/02/2013 37

11 512 14/05/2013 49

12 513 10/06/2013 27

13 514 30/07/2013 35

14 515 11/09/2013 22

15 516 30/10/2013 30

16 517 21/12/2013 26

17 518 07/03/2014 40

18 519 27/03/2014 7


SURVEY REPORT

Survey Report 4

ANDHRA PRADESH STATE FINANCIAL CORPORATION

(APSFC)

1. Company Profile

1.1 Incorporation

Andhra Pradesh State Financial Corporation (APSFC) is a State

development financial institution and was established in 1956 as a

Statutory Corporation under the State Financial Corporation Act, 1951.

Its Registered office is in Hyderabad with 25 branch offices spread

across the State. The major shareholders are the State Govt. with 85.85

% of the share capital and SIDBI with 14.02%.

APSFC has made significant contributions to the development of

small and medium scale industries in the state by providing

financial assistance in the form of medium/long term loans. It has

been active in promoting the growth of MSME sector and

generation of direct and indirect employment in the state.


The summary of financial statements of APSFC are given in

Annexure 1. It is observed that the share capital of APSFC is

Rs.206 crores as on 31st March 2013. It has sanctioned Rs 1430

crores of financial assistance in 2012-13 as against Rs.1369

crores in the previous year, recording a growth of 4.48%.

Disbursements increased to Rs.951crores as compared to Rs.937

crores in the previous year. However, recoveries increased

marginally from Rs.966 crores to Rs.989 crores in 2012-13. The

interest income increased from Rs.330 crores in 2011-12 to

Rs.370 crores in 2012-13, recording a growth of 11.91%. Other

income increased from Rs.38 crores to Rs.42 crores. Although the

interest income and other income increased, the operating profit


SURVEY REPORT

for the year is lower at Rs.98 crores compared to Rs.112 crores in

the previous year, mainly due to increase in interest expenses on

non–SLR Bonds and interest on bank borrowings. The bad debts

written off this year was also higher at Rs.52 crores as compared

to Rs.33 crores in the previous year. The net profit was lower at

Rs.63 crores as compared to Rs.68 crores in the previous year.

The summary of financials are attached in Annexure 1.


As on 31.03.2013, the staff strength is 412 (excluding sub-staff),

out of which 314 employees consisted of members from various

disciplines such as management, engineering, chartered

accountants, cost accountants and legal. During the year, 40

officers were appointed in various disciplines.

2 Constituents of Corporate Governance

2.1 Objectives

The Corporation has a statement of objectives as given below:

a) To industrialize the state through balanced regional

development and dispersal of industries.

b) To support promotion and development of tiny, small and

medium scale industries and service sector units by

extending need based credit to them.

c) To nurture entrepreneurship and encourage first generation

entrepreneurs.

d) To act as a catalyst for generation of employment.

2.2 Vision

The Corporation does not have a stated vision statement.

2.3 Mission

The Corporation does not have a stated mission statement.


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2.4 Values

The Corporation does not have a stated values statement.


The Corporation does have a Citizen’s Charter.


There is no code of conduct for the employees.

2.7 Safety, Health and Environment Policy

There is no stated policy statement on safety, health and

environment of employees.

2.8 Quality Policy

The Corporation does not have a stated Quality Policy.


The Corporation does not have a stated code of corporate

governance.

3 Board Structure

3.1 Composition of Board

The Board comprises of 10 directors, of which 2 are whole-time

and 8 are non-whole time as per Table 1 below. The Chairman

and Managing Director positions have been separated. The

Chairman is the non- executive head of the Board and the

Managing Director reports to him. The Chairman has been

appointed by SIDBI and the Managing Director is appointed by the

State Govt.

The Board has the relevant expertise in the areas of financial

services, industry, entrepreneurship and accounting. The

Commissioner of Industries is an ex-officio member of the Board


SURVEY REPORT

appointed by State Government, the other ex-officio directors are

appointed by SIDBI and LIC.

Table 1


Sl.No. Name Designation Status

1 Sri. T S Appa Rao, IAS (Retd) Chairman Appointed by SIDBI

2 Dr. Rajat Kumar, IAS Commissioner of Industries

Nominated by State Government

3 Sri. K Pattabhi Seetharama Rao Chartered Accountant

Nominated by State Government

4 Sri. S Mallikarjun General Manager

Nominated by SIDBI

5 Sri. R P Malik Chief General Manager

Nominated by SIDBI

6 Sri. Uday Kumar Navani Sr. Divisional Manager

Nominated by LIC

7 Sri. K Jagadish Prasad Industrialist Elected by Shareholders

8 Sri. C. Rajendra Prasad Industrialist Elected by Shareholders

9 Sri. K. Narasimhamurthy Cost & Management Consultant

Co-opted by Board

10 Sri. MBN Rao Former Chairman of Indian Bank & Canara Bank

Co-opted by Board

An analysis of the composition of the Board for the three year

period from April 2010 to March 2013, shows that 13 directors

were inducted and 18 directors have relinquished office, therefore,



From the table 2 below, it is observed that the Managing Director

has been in office for 2 years and 4 months only.


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Table 2

Term and Tenure of Managing and Whole-time Directors

Sl.

No.

Name of Director Date of

Joining

Date of

Separation

Tenure

in

months

1 Sri. T Satyanarayana Rao IAS 7-01-2012 31-03-2014 26

2 Sri J.S.V. Prasad IAS 1-04-2014 Till date




There are 4 independent directors on the Board drawn from

industry, accounting and financial services. Including these

directors provide the stability and also bring about diversity to the

Board.


The Corporation does not have a full time Company Secretary.

4 Board Processes


It is observed from the Annexure 2 that during the period 2011-

14, about 10 Board Meetings have been held in a year and

sometimes even twice a month. It seems that the Board is

primarily meeting to approve proposals for sanction of financial

assistance. The high frequency of meetings indicates that

probably the powers of the Board have not been sufficiently

delegated.



SURVEY REPORT

Details of attendance and leave of absence of Directors is given

in Annexure 3. It is observed that most of the Directors have

attended the meetings despite the increased frequency of the

meetings.


No of items transacted

The data on the individual items transacted at the meeting was

not provided by the company. However, from a discussion with

the executives it is inferred that the items listed in Annexure 4

were discussed. The issues related to performance, release of

guidelines. Regular and review of various items such as loan

policy, exposure limits, business plans, performance in key areas

of operations, overall assessment of financial position, actual vis a

vis approved budgets and other policy matters for sanction of

financial assistance were discussed. In particular the Board has to

approve loans above Rs. 8 crores.

Action Taken Report


Appointment of auditors

The Corporation appoints its Statutory Auditors as recommended

by the Reserve Bank of India under Section 37 (1) of SFC Act.





meeting.



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Business Plan


observed that the business plan and future strategy are items on

the agenda in the quarterly Board Meetings. .

5 Board Committees

An Audit Committee of the Board has been constituted.


The Audit Committee as per table 3 below is comprised of three

members, who are all non-executive directors. The Chairman is

financially literate.

Table 3

COMPOSITION OF AUDIT COMMITTEE

S.No. Member Designation

1 Sri. K Narasimhamurthy Chairman

2 Sri. K Jagadish Prasad Member

3 Sri. C. Rajendra Prasad Member

5.2 Audit Committee - Frequency of Meetings and Attendance of

members as per table 4 below.

Table 4

FREQUENCY OF AUDIT COMMITTEE (AC) MEETINGS AND ATTENDANCE INCLUDING INVITEES 2011-12

Sl. No. Meeting No. Date No. of

Members Present

No. of Members Absent

1 25 29-04-2011 4 1

2 26 20-06-2011 5 0

3 27 25-10-2011 5 0

4 28 30-03-2012 4 0


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Members Present


1 29 11-04-2012 3 2

2 30 11-05-2012 4 1

3 31 02-07-2012 5 0

4 32 30-10-2012 4 1



Members Present


9 33 04-07-2013 4 1

10 34 11-10-2013 5 0

11 35 08-11-2013 5 0

12 36 28-03-2014 5 0

5.3 Audit Committee -Agenda – Action Taken Report



5.4 Audit Committee Agenda – Internal Audit Reports

The Audit Committee reviews the internal Audit Reports and

exceptions if any are being reported to the Board.

5.5 Audit Committee Agenda – Quarterly Accounts

The Audit Committee Agenda reviews the Monthly/Quarterly

Accounts.

5.6 Audit Committee Agenda – Business Plan

The Audit Committee Agenda covers review of the Business

Plans.

5.7 Audit Committee Agenda – Accounting Policy


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The Audit Committee reviews the Accounting Policies.

5.8 Audit Committee Agenda – Risk Coverage of Assets

The Audit Committee agenda reviews Risk Coverage of assets

including loans.

6 Process Enablers


The Corporation has a well laid out Organization Structure.


Clear cut delegation of powers are in place for the operations of

the corporation flowing from Board of Directors down to the

Managers and Officers of the Corporation.

6.3 Process Manuals – ISO/Others

The Corporation is an ISO Certified Organisation with requisite

Process Manuals.


The Corporation's processes are ERP enabled through a system

that is developed internally.

6.5 Internal Controls – Internal Audit Observations

The internal audit has been carried out on the transactions of

APSFC upto the year 2013–14 and no serious observations were

reported.


7.1 Annual Report


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The disclosure of information in the Annual Reports of the

Corporation is exhaustive and in compliance with the

requirements under SFC Act.




The related party transactions are being put up to the Board for

review.

7.4 Qualifications/Observation by Statutory auditors

There have not been any Qualifications/Observation by the

auditors of the Corporation over the last 3 financial Years.


The Corporation's website contains requisite information with

regard to the ownership, capital structure, business, customers,

financials, Management Structure etc.


SURVEY REPORT

Annexure 1

Balance Sheet as at 31st March

Sl.No. 2012 2013 Rs. lakhs I Capital and Liabilities

Share Capital 20600.99 20600.99 Loans pending conversion to Share

Capital 1334.00 1334.00 Reserve Fund and Other reserves 21140.46 23567.62 Borrowings 221655.96 257466.70

Current Liabilities and Provisions 27923.71 24722.91 Total 292655.12 327692.22

II Property and Assets

Cash & Bank balances 21550.71 24708.38

Investments 2225.56 7759.63 Loans and Advances(Net of NPA

Provisions) 238438.63 267572.52 Fixed Assets 15054.56 15086.93 Other Assets 15385.66 12564.76 Total 292655.12 327692.22


SURVEY REPORT

Annexure 1 Contd.

Profit and Loss Account for the year ended 31st March

2012 2013

Rs.Lakhs

Income

Interest on Loans and Advances 33032.81 36967.63

Other Income 3768.80 4168.59

Total 36801.61 41136.22

Expenditure

Interest and other financial expenses 16478.03 20232.73

Personnel Expenses 5137.57 5060.61

Administration Expenses 596.80 649.00

Depreciation 125.66 185.60

Bad Debts Written off 3251.17 5198.76

Total 25589.23 31326.70

Operating Profit 11212.38 9809.52

Add:

Deferred Tax asset 318.57 (134.59)

Excess provision of MGD written back 107.79

Profit before provisions 11530.95 9782.72

Less:

Provision for Income Tax 3017.99 2530.61

Provision for incentives to employees 200.00 181.52 Provision for retirement benefits of employees 1189.86 506.06

Provision against standard assets 290.60 229.34

Net profit carried to P & L Appropriation Account 6832.50 6335.19


SURVEY REPORT

Annexure 2

FREQUENCY OF BOARD MEETINGS

S.No. Board Meeting No Date Gap in Months

1 749 29-04-2011

2 750 27-06-2011 2

3 750adj 28-06-2011 0

4 751 28-07-2011 1

5 752 06-08-2011 1

6 753 05-09-2011 1

7 754 10-10-2011 1

8 755 28-10-2011 0

9 756 22-11-2011 1

10 757 26-12-2011 1

11 758 31-01-2012 1

12 759 21-02-2012 1

13 760 07-03-2012 1

14 761 28-03-2012 0

15 762 11-05-2012 2

16 763 18-06-2012 1

17 764 02-07-2012 1

18 765 30-07-2012 0

19 766 30-08-2012 1

20 767 24-09-2012 1

21 768 30-10-2012 1

22 769 06-12-2012 1

23 770 10-01-2013 1

24 771 11-02-2013 1

25 772 05-03-2013 1

26 773 26-03-2013 0

27 774 11-05-2013 2

28 775 04-07-2013 2

29 776 29-07-2013 0

30 777 19-10-2013 3

31 778 08-11-2013 1

32 779 18-01-2014 2

33 780 28-02-2014 1

34 781 15-03-2014 1

35 782 28-03-2014 0


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Annexure 3

DETAILS OF ATTENDANCE AND LEAVE OF ABSENCE OF DIRECTORS 2011-12

Board Meeting No



749 29/04/2011 9 2

750 27/06/2011 8 3

751 28/07/2011 8 3

752 06/08/2011 9 2

753 05/09/2011 9 2

754 10/10/2011 7 4

755 28/10/2011 6 5

756 22/11/2011 10 1

757 26/12/2011 8 3

758 31/01/2012 9 2

759 21/02/2012 9 2

760 07/03/2012 10 1

761 28/03/2012 7 3


Board Meeting No



762 11/05/2012 7 3

763 18/06/2012 8 2

764 02/07/2012 9 1

765 30/07/2012 8 2

766 30/08/2012 7 3

767 24/09/2012 8 2

768 30/10/2012 9 1

769 06/12/2012 7 3

770 10/01/2013 7 3

771 11/02/2013 8 3

772 05/03/2013 6 5

773 26/03/2013 8 2


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Annexure 3 Contd.


Board Meeting No



774 11/05/2013 6 5

775 04/07/2013 7 3

776 29/07/2013 5 5

777 19/10/2013 7 2

778 08/11/2013 8 1

779 18/01/2014 8 1

780 28/02/2014 7 2

781 15/03/2014 8 1

782 28/03/2014 7 2


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Annexure 4


1. Routine Business

Action Taken Reports on Previous Board Meetings

2. Operations & Employees Related

NPA Recovery Status Reports

Annual Budgeted Business Plan

3. Financial Issues

Quarterly financial Performance of the Corporation

Changes in Accounting Policy arising out of SIDBI Guidelines

Reports of the Audit Committee

Review of Delegation of Powers within the Corporation

4. Legal Compliance Issues

Impacts of changes in legislations applicable on the corporation

5. Reconstitution of the Board

Changes in Members of the Board deputed from State Government, LIC,

SIDBI etc.,


SURVEY REPORT

Survey Report 5

ANDHRA PRADESH STATE ROAD TRANSPORT CORPORATION

(APSRTC)

1 Company profile:

1.1 Incorporation

Andhra Pradesh State Road Transport Corporation (APSRTC)

was established on 11th January 1958 under the Road Transport

Corporation Act, 1950. It has registered steady growth over the

years, from 609 buses, 16 depots and a staff of 5081 in 1958 to

12,126 buses in May, 2014 and an infrastructure of 122 bus

stations, 216 depots and 1,881 bus shelters. APSRTC’s network

covers 79.83 lakhs kms. and provides transportation to 156.78

lakh passengers every day. They connect all major towns and

cities in Andhra Pradesh and constitute 95% of Road Transport

of State. The Corporation's buses also connect important towns

and cities in the neighbouring states of Tamilnadu, Karnataka,

Maharashtra, Goa, Odisha and Chattisgarh. The administrative

control of the entire network is under 23 Regional Managers in 7

Zones, with Zonal Head Quarters at Hyderabad.

APSRTC is the top performer among all the State Transport

Corporations in India in terms of vehicle productivity and resource

utilization.


The traffic revenue for the financial year ended 31st March 2013

was at Rs.6519 crores as against Rs.5706 crores for the

previous year ended 31st March 2012 recording an increase of

14.3 percent. The total revenue for the Corporation was


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Rs.7711 crores for the financial year ended 31st March 2013 as

compared to Rs.6750 crores for the year ended 31st March 2012.

The Corporation reported a loss of Rs.81 crores for the year

ended 31st March 2013 as compared to a loss of Rs.585 crores

for the previous year. The total capital employed in the

Corporation is Rs.4300 crores. The summary of financial

statements are given in Annexure1 .


As on 30.11.2014, the employee strength was 119441 as against

sanctioned strength of 128013. There seems to be shortage of

staff in Maintenance, Vigilance & Security which could adversely

affect performance. The breakdown of the employees is given in

table below. It is observed that there is huge understaffing in the

critical areas such as maintenance and security. The passenger

traffic function is sufficiently staffed which is also a critical

function.

Table 1


Sl. No.

Name of the Post Sanctioned

Strength Filled

Vacant Positions

1 Passenger Traffic 97509 97314 195

2 Maintenance 22665 16105 6560

3 Procurement & Materials 752 467 285

4 Finance & Audit 1359 1248 111

5 Civil & Electrical 370 188 182

6 Medical & Hospitalization 276 220 56

7 Vigilance & Security 2106 1440 666

8 Administration 2127 1754 373

9 Statistics 99 39 60

10 Officers 750 666 84

TOTAL 128013 119441 8572



SURVEY REPORT

2.1 Objectives

The Corporation has identified the following objectives:

� To provide efficient, effective, ethical management of the

business.

� To assist the State administration in attaining good governance.

� To treat the customer, i.e. passenger, as a central concern of

the Corporation's business and provide the best possible

service.

� To explore and exploit technological, financial and managerial

opportunities and developments and render the business cost

effective at all times.

� To regularly and constantly improve the capabilities of

employees for higher productivity.

� To focus on service conditions and welfare of the employees

and their families consistent with their worth to the

Corporation.

� To fulfill its obligation to the State and Central governments by

optimizing return on investment.

� To emphasize environmental and community concerns in the

form of reducing air and noise pollution.

� To consciously conform to the policy guidelines of the State in

its business operations.

� To reach a position of pre-eminence in bus transport business.

2.2 Vision

The Corporation has a vision statement.

“The Corporation is committed to provide consistently high

quality of services and to continuously improve the services

through a process of teamwork for the utmost satisfaction of the


SURVEY REPORT

passengers and to attain a position of preeminence in the Bus

Transport sector”.

2.3 Mission

The Corporation does not have a stated mission statement but

has a Corporate Philosophy and guiding principles.

Corporate Philosophy

� To provide safe, clean, comfortable, punctual and courteous

commuter service at an economic fare.

� To provide employee satisfaction in financial and humanistic

terms.

� To strive towards financial self-reliance in regard to

performance and growth.

� To attain a position of reputation and respect in the

society.

Guiding Principles:

� To provide efficient, effective, ethical management of the

business.

� To assist the State administration in attaining good

governance.

� To treat the customer, i.e. passenger, as a central concern

of the Corporation's business and provide the best possible

service.

� To explore and exploit technological, financial and

managerial opportunities and developments and render the

business cost effective at all times.

� To regularly and constantly improve the capabilities of

employees for higher productivity.

� To focus on service conditions and welfare of the employees

and their families consistent with their worth to the

Corporation.


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� To fulfill its obligation to the State and Central governments

by optimizing return on investment.

� To emphasize environmental and community concerns in

the form of reducing air and noise pollution.

� To consciously conform to the policy guidelines of the State

in its business operations.

� To reach a position of pre-eminence in bus transport

business.

2.4 Values

The Corporation does not have a stated values statement.


The Corporation has a stated citizen’s charter.


The Corporation does not have a stated code of conduct for the

employees.


The Corporation does not have a stated EHS policy.

2.8 Quality Policy

There is no stated quality policy.


The Corporation does not have a stated Corporate Governance

code.

3 Board Structure :


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The Chairman and Managing Director (MD) posts are separate

and independent.

The list of Directors is given in Annexure 2 as on December 12,

2014. It is observed that there are 14 directors on Board

excluding the Vice Chairman & Managing Director, 5 functional

directors and 6 ex-officio directors from the State Govt and 2

union representatives. Ex-officio directors have been drawn from

the Transport Department, Employment, Railways, Finance and

Road Transport. These ex-officio positions are extremely

important for the Corporation, as they facilitate effective

coordination between the parent Department and the Corporation.

Also, representation from the Labour & Employment Departments

is necessary for the linkages that the Corporation would need.

An analysis of the composition of the Board for the period from

April 2010 to March 2013, eight directors were inducted and six

directors have relinquished office. Therefore, some of the directors

would have had very short tenures could not have completed even

two years.

3.2 Term &Tenure of Managing Director & Whole time Directors

The Corporation is headed by a Corporation Board consisting of

16 Directors including the Chairman. 14 Directors including the

Chairman and Vice Chairman & Managing Director are appointed

by the State Government, one each shall be nominated by the

Railways and the Association of Road Transport Undertakings,

New Delhi. The term of office of the Directors is for 3 years. 9

Directors including the Chairman are non official members and 7

Directors including the Vice Chairman & Managing Director are

whole time members. Generally, officers from IAS and IPS cadre

are appointed as Vice Chairman & Managing Director of the

Corporation.


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The Corporation does not have a qualified company secretary as

it is not mandatory as per the RTC Act.

4. Board Processes :


The Table 2 below gives the frequency of conducting the Board

meetings during the period March 2011 to October 2014. The

Corporation has been holding the Board meetings regularly and

sometimes even once a month. The frequency of meetings

indicates that probably the Board is exercising operational control

and may also consider the possibility of delegating its powers.

Table 2

FREQUENCY OF BOARD MEETINGS 2011-2012

S.No. Date Gap in Months

1 31-03-2011 2 23-06-2011 2 3 08-11-2011 4


S.No. Date Gap in Months 1 04-04-2012 4 2 18-04-2012 0 3 27-06-2012 1 4 16-11-2012 4 5 08-02-2013 2


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S.No. Date Gap in Months 1 30-04-2013 1 2 06-09-2013 4 3 10-01-2014 3 4 11-02-2014 0


S.No. Date Gap in Months 1 15-05-2014 2 2 10-10-2014 4


As seen from Table 3 below that although most of the directors

have been present at the meetings, in one meeting in 2014, 7

directors have requested for leave of absence. In 2014 the

number of directors altered very frequently. Also it is observed

that in most meetings the ex-officio directors have been absent.

Table 3


S.No. Meeting date 23-06-11 08-11-11 04-04-12

1 Directors Present 7 7 6

2 Directors Absent 4 4 5

Total 11 11 11


Sl. No.

Meeting date

18-04-12 27-06-12 16-11-12 08-02-13

1 Directors Present

6 7 6 10

2 Directors Absent

5 4 5 0


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Total 11 11 11 10


Sl.

No.

Meeting

date

30

Apr.

06

Sept.

10

Jan.

11

Feb.

15

May

10

Oct.

1 Directors

Present 10 11 11 9 9 11

2 Directors

Absent 0 0 0 6 5 7

Total 10 11 11 15 14 18


Number of items transacted

A list of major items discussed in the Board meetings, is given in

Annexure 3. Number of items transacted in the Board Meetings

is given in table 4 below. It is observed that in one meeting 40

items have been discussed and in one meeting only one item

was discussed. The number of items discussed shows a highly

skewed pattern. In some cases, it may have been difficult to

deliberate on issues with sufficient depth.

Table 4

NO OF ITEMS TRANSACTED AT BOARD MEETINGS 2011-12

S.No. Date No of Transactions 1 31-03-2011 32 2 23-06-2011 25 3 08-11-2011 49


S.No. Date No of Transactions 4 04-04-2012 29 5 18-04-2012 6 6 27-06-2012 22


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7 16-11-2012 33 8 08-02-2013 29


S.No. Date No of Transactions 9 30-04-2013 29

10 06-09-2013 33 11 10-01-2014 26 12 11-02-2014 19


S.No. Date No of Transactions 13 15-05-2014 46 14 10-10-2014 2

Action Taken Report

Based on an examination of the Board minutes, it is observed that

the action taken report has been reviewed in all Board meetings.


The Accounts of the Corporation are audited annually by the

Comptroller and Auditor General of India under Sec. 33 of The

Road Transport Corporation Act, 1950.




A study of the agenda items placed before the Board as given in

Annexure 3 reveals that the operations and employee related

issues were most frequently discussed.


SURVEY REPORT

Based on a review of the items transacted it is observed that the

Board regularly reviews the operating results at every Board

meeting.

Business Plan

Within the operations related issues, the progress of work done

on the civil construction projects relating Bus Stations and Depots

were discussed most frequently. In particular, issues related to

expediting the projects and procurement of equipment, received

maximum attention.

Based on the minutes of the Board meeting, it was observed that

the business plan and long term strategy of the Corporation are

not included as agenda items.

5. Board Committees :

The Board has constituted the following committees with the stated

objectives:

� Selection Committee – Prepare panel of eligible candidates in

the officers cadre by direct recruitment and promotion.

� Disciplinary Committee- Disposal of appeals in respect of

specified level of officers and imposition of penalties.

� Industrial Relations & Labour Welfare Committee – Review

industrial relations situation in the Corporation and lay down

policy guidelines and welfare measures for the employees.

� Finance, Works & Purchase Committee- Review and sanction

the proposals to purchase items in bulk.

� Routes Committee - Proposed modalities for rationalization of

the routes.

Except for the Selection Committee, matters of other committees are

put before the Board Meeting for consideration in spite of the existence

of separate Board Committees for the same.


SURVEY REPORT

6. Process Enablers


The Corporation has a well-designed organization structure

separately for the corporate office at Hyderabad, zonal offices and

the field units. The executive directors on the Board represent the

following functions - Operations, Commercial, Projects and IT,

Finance and HRD. The Executive Directors are assisted by Chief

General Managers, General Managers and senior managers in

charge of the zones and the project offices.


A delegation of powers document, has been developed devolving

powers from the sanctioning authority to the various levels of

employees in the organization.

6.3 Process Manuals

The major processes of the Corporation are being given in

manuals and standard operating procedures for its operations.

The maintenance function being one of the major functions it

follows preventive maintenance of buses at Depots and major

repairs / overhauls at Work Shops. For this purpose Corporation

has constructed 7 Retreading Shops and 7 Work Shops. The Bus

Body Building Unit in Hyderabad builds more than 600 bus bodies

every year. Modern and updated technologies have also been

introduced.

E-Procurement:

The Corporation has implemented e-procurement to procure

automobile spares, general items etc through the e-procurement

portal that is set up by the GoAP.



SURVEY REPORT

The Corporation has defined systems and procedures covering

all functional areas such as Operations, Maintenance, Stores and

Purchases, Finance, Accounts, Administration etc., The individual

procedures provide for maintenance of proper records in support

of the transactions entered into in accordance with the rules /

regulations / procedures so as to achieve respective functional

objectives. The Corporation conducts a pre audit and post audit

scrutiny for all payments. From the observed procedures it can

be concluded that the Corporation has extremely well defined and

robust internal controls.


The internal auditors have made the following observations:

� Theft of Bus Cash

� Non-payment of monthly rent of the Rythu Bazaars

� Excess payment of monthly remuneration to employees

� Discrepancy in HSD oil consumption vis a vis meter

readings

� Sale of fake tickets by some employees amounting to loss

of Rs.43 lakhs to the Corporation

� Alteration of Bus passes by the students and employees,

resulting in revenue loss of approximately Rs.2.09 crores

7. Transparency & Disclosure

7.1 Annual Report

Adequate disclosures have been made in the Annual Report in

accordance with the legal requirements.

7.2 Qualifications/Observations by Statutory Auditors

The statutory auditors have commented that there are adequate

internal control systems commensurate with the size and nature of

the business with regard to purchase of inventory, fixed assets


SURVEY REPORT

and sale of goods/services. Further they have also commented

there is no major weakness in the internal controls.


The related party transactions with companies in which the

directors are interested are not being disclosed or put up to the

Board for review. No disclosures have been made in the annual

report on related party transactions.


The Corporation has a web site through which the it disseminates

information on its activities to its stakeholders. The Annual

Reports for the last 3 years are available on the website. The

information disclosed on the website is adequate.


SURVEY REPORT

Annexure 1

Balance Sheet As on March 31

Rs. lakhs Sl.No. 2012 2013 I Capital and Liabilities Capital Contribution 20183.82 20127.39 Term Loans 380621.75 410596.04 Funds Depreciation Fund 190512.07 215907.37 Other Funds and Reserves 13714.99 24623.98 Deposits and Advances 22318.79 21542.38 II Current Liabilities and Accrued

Charges Creditors 12058.50 8605.04 Pay and Allowances 5207.03 5854.41 Interest Accrued 2210.04 467.89 Non Departmental Recoveries 9841.20 10699.97 Provisions 231641.08 103727.83 Others 1662.42 2553.99 Total 889971.68 824706.28 III Properties and Assets Fixed Assets

Vehicles, Land, Buildings etc., 330898.25 344670.56 CWIP - Vehicles and Buildings 7494.21 8093.56 Investments 4062.35 87.85 IV Current assets

Stock 7991.04 8103.75 Disposable Stock 1334.08 1880.08 Work in Progress 23.68 27.34 Sundry Debtors & Bills Receivable 263304 186087.71 Loans, Advances and Deposits 14312.57 6256.27 Interest Accrued & prepaid Expenses 235.98 269.85 Cash, Bank & Imprest 506.02 1241.34 Funds in Transit 80.27 51.69 Suspense Accounts 2819.08 2955.10 Profit and Loss Appropriation Account 256910.15 264981.18 Total 889971.68 824706.28


SURVEY REPORT

Annexure 1 Contd.

Profit and Loss Account for the year ended 31st March

2012 2013

Volume Kms in Lakhs 28714.94 29787.35

Total

Rs. lakhs Rs.

Per Km. Total

Rs. lakhs Rs.

Per Km.

Income Operating Income - Traffic Revenue 570592.19 19.87 651877.35 21.88

Non operating Revenue 16637.01 0.58 18670.77 0.63

Other Revenue 87762.78 3.06 100599.55 3.38

Total Income 674991.98 23.51 771147.66 25.89

Expenditure

Passenger Traffic 260591.51 9.08 272851.34 9.16

Repairs and Maintenance 77422.38 2.70 83454.71 2.80

Power 201853.23 7.03 234098.15 7.86

Licenses & Taxes 43153.78 1.50 14470.30 0.49

Welfare & Superannuation 48683.76 1.70 50615.78 1.70 General & Administrative Expenses 41063.85 1.43 41662.73 1.40

Contribution to Stores obsolete Fund 1.41 0.00 10.00 0.00 Contribution to Depreciation Fund 30635.17 1.07 42843.64 1.44

Non operating Expenses 30117.87 1.05 39212.04 1.32

Total Expenditure 733522.96 25.54 779218.69 26.16

Net Loss Carried to P & L Appropriation Account

(58530.98) (2.04) (8071.02) (0.27)

Annexure 2


SURVEY REPORT

Composition of the Board Directors as on 12-12-2014

Sl.

No Name Designation

1 Dr.J Purnachandra Rao Vice Chairman & Managing Director

2 Mr. B.Sam Bob Principal. Secy. to Govt (Transport), TR & B Department

3 Mr. Jagdish Chander

Sharma

Principal Secretary to Govt. Labour Employment Training & Factories Dept.

4 Mr. L. Premchandra Reddy Secretary to Government Finance (W&P) Department

5 Ms. Usha A.Kumar FA & CAO, South Central.Railway

6 Mr. M.Gangadharam Engineer - In- Chief (R&B), State Roads,

7 Mr. D.S.Pathania Joint Secretary(T), Ministry of RT & Highway, G.O.I

8 Mr. G.V.Ramana Rao Joint Managing Director & ED (O, MIS & AM),

9 Ms. G.Jaya Rao Executive Director (E)

10 Mr. M.Ravindar ED (HRD & Medical) & Secretary to Corpn, APSRTC

11 Mr. A.Venkareswara Rao Executive Director (A&P), APSRTC

12 Mr. N.Bhuvaneeswara

Prasad

Financial Advisor & Chief Accounts Officer, APSRTC

13 Mr. B.Radhakrishnaiah Chief Vice President, APSRTC Employees' Union

14 Mr. K.Padmakar General secretary, APSRTC Employees' Union

Annexure 3


SURVEY REPORT


1 Routine Business Related


Action Taken Report arising out of previous meetings

2 Reconstitution of the Board Related

Changes among directors in the board

3 Operation Related

Quarterly Performance of the Corporation

Payment of APVAT on procurement of HSD Oil Seeking relief from Government

Licensing of premises to State Bank of India

4 Financial Related

Approval of Budget Estimates and Revised Budget Estimates

Changes in Depreciation Policy of TIMS for Drivers and Conductors

5 Capex Related Business

Fabrication of Bus Bodies - Approval of Negotiated Prices and Placement of orders

6 Statute Related

Approval of Annual Accounts

7 Employee Remuneration Related

Recruitment of personnel, Resignation and Promotion of Employees

Sanction of pay revision to employees

Deputation of Employees

Amendment to Delegation of powers - Revision in Financial Powers to Regional Managers, Executive Directors and VC & MD


SURVEY REPORT

Survey Report 6

NEWABLE ENERGY DEVELOPMENT CORPORATION OF

ANDHRA PRADESH LTD. (NREDCAP)

1 Company profile

1.1 Incorporation

New & Renewable Energy Development Corporation of Andhra

Pradesh Limited (NREDCAP), formerly Non Conventional Energy

Development Corporation of Andhra Pradesh, was incorporated

in the year 1969 under the Companies Act, 1956. It is the State

Nodal agency for promotion of various renewable sources of

energy programmes in Andhra Pradesh.

NREDCAP was incorporated to tap the potential for wind and

solar power in the State. NREDCAP is in a unique position to

utilize these resources and develop the demand for renewable

energy source and thereby reduce the burden on non-renewable

energy sources.


The financial statements for the financial year ended 31st March

2013 are given in Annexure 1. The company has a share capital

of Rs.22.00 lakhs and reserves of Rs.20 crores. The Company

has a cash balance of Rs.61 crores funded by OCL of Rs.73

crores.


The manpower strength of the company 8th January 2015 is 126.


SURVEY REPORT


2.1 Objectives

The objectives of NREDCAP are:

� To generate electricity through renewable sources like wind

and solar on decentralized manner

� To conserve energy in rural areas

� To import and adopt viable technology and machinery in the

areas of non-conventional energy sources and ensures post

installation service

� To impart training and to promote research and development

in the field of non-conventional energy sources

2.2 Vision

The company’s vision is stated as :

"To be a pioneer institute in the area of promotion of Non-

conventional / Renewable energy projects with state-of-art

technologies coupled with experts and technocrats to present

highly competitive and efficient products to the consumer".

2.3 Mission

The Company’s mission is to promote, develop, encourage,

popularize and carry out consultancy, field research and

experiments for implementation of Non-conventional / Renewable

energy projects and gadgets sponsored by both State and Central

Governments.

2.4 Values

The Company does not have a stated values statement.


The Company does have a stated Citizen’s Charter.


SURVEY REPORT


The Company does not have a Code of Conduct for Employees.

But has Service Rules for its employees.

2.7 Environment, Health & Safety Policy

The Company does not have an EHS Policy. It has health insurance

policy covering all its employees.

2.8 Quality Policy

The Company does not have a stated quality policy. The

Company is following the guidelines issued by the Central

Government in respect of supply of power.


NREDCAP does not have a written principal or code of Corporate

Governance.

3 Board Structure


The table 2 below gives the list of the directors as on 8th January

2015. It is observed that the Board is comprised of five Directors.

The position of Chairman and Managing Director has been

separated. The Chairman is an ex-officio position. However, most

of the directors are ex-officio from the Energy and Finance

Department. This would facilitate the linkages of the Board with

concerned departments. However, there is no domain expertise or

functional areas representation in the Board.

A study of the participation of the members of the Board in the

meetings reveals frequent changes being effected in the

composition of Board of Directors of the Corporation. This has

deprived the Corporation of the continuity of members on the

Board. During tenure of three years from 2010-2013, the


SURVEY REPORT

Corporation had about 20 members as its Directors at one point of

time or the other.

The lack of continuity in leadership would severely impact the

accountability of management particularly in a sector which

requires continued attention from the State Govt.

Table 2


Sl. No.

Name Designation

1 Mr Ajay Jain, IAS Chairman, Secretary to Government, Energy Department Govt of A P

2 Mr M. Kamalakar Babu Vice Chairman & Managing Director

3 Dr P.V. Ramesh, IAS Principal Secretary, Finance Department, (R&E), Government of A.P

4 Mr M Venkateswara Rao Engineer-in-Chief (Irrigation Wing), Irrigation Dept Govt of A P

5 Mr Muthyala Dharmendra Rao Independent Director

During the financial year 2012-13 four directors were inducted and

six directors have relinquished office. Therefore, some of the

directors could not have completed even one year in office.

3.2 Tenure of Vice Chairman & Managing Director

The tenure of the Vice Chairman and Managing Director is given

in Annexure 2. It is observed that in most cases the tenure is less

than a year. Some appointments have been for less than a

month also. The frequent changes in the VC & MD position has

seriously affected the continuity in the leadership.





SURVEY REPORT

There is one independent director on the Board.


The Company does not have a full time company secretary to

look after its legal and secretarial matters.

4 Board Processes


The frequency of the Board meetings during the period 2010 -13

is given in table 3 below. It is observed that the Board meetings

are being conducted once a quarter, which is in compliance with

the legal requirements. There was only one instance in June

2012, where the gap between 2 meetings exceeded 3 months. In

fact, the company has been meeting once a month also, indicating

that Board approvals are being required for certain decisions

which cannot be implement without Board approval.


The Details of Board Meetings held during the past three years

along with the directors attendance given in the following table 4.

It is observed that a very large number of items are being

considered and transacted by the board. It would be difficult for

the Board to allocate sufficient time for the discussion on the

Agenda items.

Please see annexure 3 for a summarized attendance of the Board

members at the meetings. There have also been instances of

some directors attending only a single meeting during their period

of directorship.

Table 4


SURVEY REPORT

FREQUENCY OF BOARD MEETINGS AND ATTENDANCE OF DIRECTORS 2010-11

Sl. No.

Board

Meeting No

Date Directors No of Transactions

Gap in

Months

1 213 30/04/2010 4 13

2 214 26/06/2010 5 9 2

3 215 03/08/2010 4 16 1

4 216 04/09/2010 5 9 1

5 217 07/12/2010 4 26 3

6 218 09/03/2011 4 11 3


Sl. No.

Board

Meeting No


Gap in

Months

7 219 25/04/2011 4 28 2

8 220 13/05/2011 6 9 1

9 221 29/06/2011 4 18 1

10 222 05/09/2011 5 30 2

11 223 03/10/2011 5 13 1

12 224 21/12/2011 5 10 2

13 225 05/01/2012 5 5 1


Sl. No.

Board

Meeting No


Gap in

Months

14 226 23/06/2012 4 14 5

15 227 28/09/2012 4 9 3

16 228 05/11/2012 5 11 1

17 229 30/03/2013 4 12 4


Sl. No.

Board

Meeting No


Gap in

Months

18 230 29/06/2013 2 7 3

19 231 30/09/2013 5 9 3

20 232 26/12/2013 4 4 3



SURVEY REPORT

Items Discussed

The summary of items discussed at the Board Meetings and the

list of major items transacted therein are listed in Annexure 3 and

4 respectively.

Action Taken Report







discussed in detail in every meeting.


The Comptroller and Auditor General of India appoints the

statutory auditors of the company under section 619(2) of the

Companies Act 1956 till the financial year ended March 31, 2014.

The remuneration payable to the auditors is fixed by the

shareholders in the Annual General Meeting.

5 Board Committees

There are no Board Committees.

6 Process Enablers:


NREDCAP has a well-designed organization structure. The

Organization is headed by the Chairman of the Board of Directors

who is assisted by the Managing Director The executive head of

the Company is the Vice Chairman & Managing Director


SURVEY REPORT


The Company has a well defined delegation of powers document

for the operations from Board of Directors down to the Managers

and Officers of the Corporation.

6.3 Process Manuals

There are no process manuals. However, the Corporation is

following guidelines issued by MNRE and general financial rules.

6.4 Internal Controls and Internal Audit Observations

As per the information given to us the internal audit has been

carried out on the transactions of NREDCAP upto the year 2012–

13 and no serious observations have been reported..

7 Transparency and Disclosure

7.1 Annual Report

The Annual Report has made the mandatory disclosures as per

the provisions of the Companies Act.

7.2 Disclosure of Interest by directors



The related party transactions with companies in which the

directors are interested are not being disclosed or put up to the

Board for review. No disclosures have been made in the annual

report on related party transactions.


The Corporation has not revealed much of its information through

its website.


SURVEY REPORT


SURVEY REPORT

Annexure 1

Balance Sheet as on 31st March Rs. lakhs

Sl.No. 2012 2013

I EQUITY & LIABILITIES


b) Reserves & surplus 1851.99 2041.95

2 Non current liabilities

a) Deferred tax liabilities(net) 443.09 908.68

b) Other long term borrowings 487.71 459.57


3 Current liabilities


b) Trade payables 337.29 626.53


d) Short term provisions 395.70 135.09

TOTAL 13688.77 11606.12

II ASSETS

1 Non-current assets

a) Fixed assets

1) Tangible assets 4621.07 4056.61

2) Intangible assets 2.18 1.35

Non Current Investments 0.01 0.01

b) Long term loans and advances 125.02 127.39

c) Other non-current assets 40.65 127.77

2 Current Assets



c) Cash and Bank Balances 7895.76 6191.47

d) Short term loans and advances 140.28 118.24


TOTAL 13688.77 11606.12


SURVEY REPORT

Annexure 1 Contd,


Rs. Lakhs.

2012 2013

Revenue from Operations 3528.30 3429.09

Other Income 1271.50 745.24

Total Revenue 4799.79 4174.33

Expenses

Purchase of stock in trade 370.57 787.27

Stock Adjustment (12.71) 24.37

Employee Benefits Expenses 1316.53 1185.49

Operation & Other Expenses 711.18 739.09

Financial Cost 63.53 36.81

Depreciation and Amortization Expenses 136.90 579.88

Total Expenses 2586.00 3352.91

Profit before extraordinary items and tax 2213.8 821.42

Extraordinary Items (prior period exp) 1.34 (40.33)

Profit before tax 2212.46 861.76

Tax Expenses

a. Current Tax 450.95 164.39

b. Deferred Tax 496.28 465.59

Profit after Tax 1265.23 231.77

EPS 288.21 52.79


SURVEY REPORT

Annexure 2

TENURE OF VICE CHAIRMAN & MANAGING DIRECTOR

Sl.

No.


Date of Separation

Tenure in

months

1 Mr. V. Bakthavatsalam BE MBA 26.08.1989 31.01.1989 29

2 Mr. UV Warlu 01.02.1989 17.04.1989 2

3 Mr. SK Sinha IAS 18.04.1989 16.01.1990 9

4 Mr. K. Sunder Singh 17.01.1990 23.01.1990 0

5 Mr. T. Ramamohan Rao IAS 24.01.1990 31.10.1991 9

6 Mr. D. Siva Prasad IAS 01.11.1991 19.01.1992 2

7 Mr. R. Hrudayaranjan IAS 20.01.1992 04.09.1992 7


9 Mr. R. Hrudayaranjan IAS 13.10.1992 07.11.1992 1


11 Mr. TC Pandurjangam IAS 21.11.1992 31.07.1993 9

12 Mr. B. Murali Krishna IFS 31.07.1993 16.08.1993 1

13 Mr. TV. Chowdary BE MBA 16.08.1993 25.09.1994 12

14 Mr. NK Narasimha Rao IAS 26.09.1994 14.11.1994 2

15 Mr. TV. Chowdary BE MBA 14.11.1994 21.02.1995 3

16 Mr. TH Sastry MSc. AISM 21.02.1995 02.07.1996 15

17 Mr. K. Phanindra Reddy IAS 03.07.1996 19.06.1999 35

18 Ms. Y. Mythili IAS 19.06.1999 13.07.1999 1

19 Mr. K. Mangapathi Rao IAS 14.07.1999 27.07.1999 0

20 Mr. Rajeshwar Tiwari IAS 28.07.1999 26.09.1999 1

21 Mr. K. Mangapathi Rao IAS 27.09.1999 09.11.1999 2

22 Dr. Prem Chand IAS 10.11.1999 03.08.2002 34

23 Mr. S.E. Sekhar Babu IAS 03.08.2002 18.05.2005 34

24 Mr. B. Siddhartha Kumar IFS 18.05.2005 23.05.2005 0

25 Mr. Lingaraj Panigrahi IAS 23.05.2005 26.03.2008 34

26 Mr. M. Papi Reddy IRTS 26.03.2008 04.12.2009 21

27 Mr. D. Murali Mohan IIS 04.12.2009 17.12.2009 0

28 Mr. M. Bangara Raju 17.02.2009 19.09.2010 10

29 Mr. Chandan Mitra IFS 19.09.2010 08.05.2012 21

30 Mr. M. Kamalakar Babu 08.05.2012 Onwards


SURVEY REPORT

Annexure 3

ISSUES DISCUSSED AT THE BOARD MEETINGS

Sl. No.

Board Meeting No

217 218 219 220 221 222 223 224 225 226 227 228 229 230 231 232

1 Total Items Transacted 26 11 28 9 18 30 13 10 5 14 9 11 12 7 9 4

2 Routine Business Related 5 4 4 2 5 2 2 3 2 2 4 2 2 4 3 3

3 Reconstitution of the Board Related 1 0 0 0 1 3 1 0 0 1 1 0 1 0 1 0

4 Operation Related 19 5 22 4 7 23 7 7 3 8 4 8 7 2 5 0

5 Financial Related 0 1 1 0 4 0 1 0 0 2 0 0 1 1 0 0

6 Capex Related Business 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0

7 Statute Related 0 1 0 3 1 2 0 0 0 1 0 0 1 0 0 1

8 Employee Remuneration 1 2 1

Total 26 11 28 9 18 30 13 10 5 14 9 11 12 7 9 4


SURVEY REPORT

Annexure 4




Grant of Leave of absence


Changes among directors

3 Operation Related

Consideration of proposals and Grant of permission to Private

Sector for setting up of Wind Energy Farms

Permissions for installation of Biomass Power Projects

Communication with different Departments for land allotment

Cancellation of Projects which have not adhered to Guidelines

Granting shifting of machinery from one site to another

4 Financial Related

Payment of Gratuity to the employees as per The Gratuity Act

1972

Consideration of Budget and approval of the same

Writing off of subsidy with Banks

Creation of funds for R&D


Setting up of generators and NREDCAP’s wind farm site

6 Statute Related

Review of Statutory compliance with respect to Companies Act,

Income Tax Act etc.


SURVEY REPORT

Survey Report 7

ANDHRA PRADESH TOURISM DEVELOPMENT CORPORATION

LIMITED (APTDCL)

1 Company profile :

1.1 Incorporation

Andhra Pradesh Tourism Development Corporation Ltd. (APTDCL)

was established originally on 18th February 1976 under the

Companies Act, 1956 as Travel & Tourism Corporation [Andhra

Pradesh] Private Limited with the objective of promoting the

development of travel and tourist coach services and travel and

tourism services. The Corporation develops tourist infrastructure and

packages for overall development of tourism in the State. It is

involved in many areas of development such as construction of

hotels, resorts and wayside amenities. It also develop tourist

packages and boats etc. APTDCL has also ventured into new

tourism related fields like, Heritage, Pilgrimage, Eco-tourism etc.

The key activities of the Corporation can be classified broadly into the

following:

� Hospitality (Hotels & Catering Units)

� Transport (Guided & Package Tours)

� Water Fleet (Leisure Cruises & Pleasure Boating)

� Sound & Light Shows

� Eco-Tourism

� Construction of new tourism products

� Tourism Asset management

� Conduct cultural festivals


SURVEY REPORT


The share capital of APTDCL is Rs.355 lakhs, as on 31st March

2013. The Revenue from operations was Rs.140 crores in 2012-13

as against Rs.133 crores in the previous year. The assets increased

to Rs.159 crores as compared to Rs.137 crores in the previous year.

In 2012-13 the Corporation reported a loss of Rs.13 lakhs against a

profit of Rs.375 lakhs in same period last year. The Financial

Statements are given in Annexure 1. It is observed that although the

Corporation has reported a loss this year, its cash balance has

increased substantially to Rs.92 crores.


Table 1

SANCTIONED STRENGTH AND MEN IN POSITION AS ON

DECEMBER 31st 2014

S. No. Name of the Post Sanctioned

Strength

1 Vice Chairman & Managing Director 1

2 Directors Whole – time 1

3 Senior Management 8

4 Managers – Traffic, Hotels, Waterfall etc. 13

5 Supervisors-Hotels, Transport, Waterfall etc. 36

6 Receptionists, Helpers, Waiters etc. 333

7 Drivers, Guides, Cooks, Security etc. 811

TOTAL 1203

We were informed that the Corporation is yet to obtain sanction from

the Government for the manpower strength. The Corporation is

operating based on the above strength which is approved by its

Board of Directors only.



SURVEY REPORT

2.1 Objectives 1. To start, operate and promote establishments, undertakings,

enterprises and activities of any description whatsoever, which in

opinion of the Company are likely to facilitate or accelerate the

development of travel and tourist coach services and to promote

coordination in development of travel and tourism services and

Tourism in general in order to secure, optimum utilization of

resources.

2. To take over, develop maintain and manage wayside facilities,

tourist guest houses, hotels, rest houses, travelers bungalows,

sites of tourist interest for the benefit of tourists, bus travelers and

general road users.

3. To run, establish, manage transport units and transport centres,

import, purchase, lease sell and run or otherwise operate tourist

buses, car, cab, coaches, trucks and other modes of transport.

4. To sell , construct, purchase, acquire, lease, take on lease run

and maintain motels, restaurants, canteens, cafeteria, travelers

lodges, guest houses and other places for the purpose of

boarding, lodging and stay of travelers and tourists.

5. Produce, distribute and sell tourist publicity materials: viz. edit,

design, print, publish, sell or otherwise deal with books,

magazines, periodicals, folders, inserts, guide maps, pamphlets,

bills, posters, picture postcards, diaries, calendars, slides,

cinematograph films and other material for the purpose of giving

publicity to and developing transport services for tourists and

travelers.

6. Provide entertainment for travelers and tourists by way of

cultural shows, dances, music concerts, ballets, film shows, sports

and games son-et-lumiere spectacles and others.

7. Provide shopping facilities to travelers and tourists, establish

and manage shops, emporia and other places for selling travel

requisites and other articles of interest.


SURVEY REPORT

2.2 Vision

The company has a vision statement.

"To maintain its current position as the most sought-after tourism

destination for an authentic, luxurious, and personalized feel and

experience of Andhra Pradesh for travelers from all regions."

2.3 Mission

The company has a mission statement.

� Make Andhra Pradesh travel and tourism more popular and

attractive.

� Make the public gain more awareness regarding the importance

and usefulness of travel and tourism.

� Use more publicity to promote tourism destinations including the

facilities and amenities available.

� Develop the travel and tourism industry in Andhra Pradesh, making

it more profitable and competent.

� Promote eco-friendly and responsible tourism including a profit

share to the local population.

� Offer encouragement for innovative initiatives in AndhraPradesh's

tourism sector.

� Protect the precious environment and natural resources, which are

also assets for the future of travel and tourism.

� Strengthen the existing tourism infrastructure in the Andhra

Pradesh.

� Exploit the tremendous potential for the promotion of Andhra

Pradesh Tourism.

� Identify the current gaps in tourism infrastructure and formulate

development schemes.

� Offer world-class services for the tourists visiting the State.

� Generate employment with the tourism potential.

� Make Andhra Pradesh a top most destination in India by attracting

more domestic and foreign tourists.


SURVEY REPORT

� Increase the number of tourist arrivals and increase the length of

stay of tourists.

� Enhance connectivity and improve environment, utilities and tourist

services.

� Integrated development of high- priority tourism infrastructure and

create high potential tourism circuits.

2.4 Values

The Company has a values statement.


The Company does not have stated Citizen’s Charter.


The company has adopted a code of conduct for the employees.


The company does not have an stated EHS policy.

2.8 Quality Policy

There is no stated Quality Policy.


The company does not have a stated corporate governance code.

3 Board Structure :


The Board is comprised of 5 directors of which 2 are whole time

functional directors. There are 2 ex-officio directors. The position of


SURVEY REPORT

Chairman & Managing Director has been separate. The Chairman is

ex-officio position.

Table 2

List of the Directors Sl. No. Name Designation

1 Smt. Chandana Khan, I.A.S Chairperson

2 Sri K S Reddy, IFS VC & Managing Director

3 Sri Sunil Kumar Gupta, IFS Director

4 Dr. R. Amarendra Kumar, Executive Director (P)

5 Dr. P.V. Ramesh IAS Director


From table 3 below it is observed that the Managing Director have

had short terms some as short as 2 months. This would have

affected the continuity of leadership.

Table 3

Tenure of the Managing Director

Sl. No.

Name of the Managing Director

Date of Joining

Date of Separation

Tenure in

months

1 Sri Sandeep Kumar Sultania 05/04/2010 28/07/2012 27

2. Sri B. Srinivas IFS (FAC) 28/07/2012 01/09/2012 2

3. Smt. Chandana Khan, I.A.S 01/09/2012 11/11/2013 13

4. Sri K S Reddy, IFS 11/11/2013







SURVEY REPORT

The company does not have a full time company secretary to look

after its legal and secretarial matters.

4 Board Processes :


The Board has been meeting once a quarter which is in compliance

with the legal requirements.

Table 4

Frequency of Board Meetings 2012-13

S. No. Board Meeting

No.

Date Gap in

Months

1 151 30-03-2012 3

2 152 28-06-2012 3

3 153 27-09-2012 3

4 154 31-12-2012 3

5 155 30-03-2013 3



No.

Date Gap in

Months

1 156 29-06-2013 3

2 157 30-09-2013 3

3 158 21-12-2013 3

4 159 26-03-2014 3



No.

Date Gap in

Months

1 160 17-05-2014 3

2 161 25-07-2014 3


Table 5

Details of Attendance of Directors


SURVEY REPORT

Board Meeting

No.



Total Strength

151 30-03-2012 5 3 8 152 28-06-2012 6 3 9 153 27-09-2012 7 2 9 154 31-12-2012 7 1 8 155 30-03-2013 8 2 10 156 29-06-2013 5 2 7 157 30-09-2013 4 1 5 158 21-12-2013 7 3 10 159 26-03-2014 8 1 9 160 17-05-2014 5 1 6 161 25-07-2014 4 1 5

Most of the Directors have been attending the meetings. However,

from the analysis of the minutes it is observed that leave of absence

grated by the Board and that the same director was no in attendance

at consecutive meetings.


A list of major items discussed and transacted in the Board Meetings

is given in Annexure 2. From this list it is observed that wide ranging

issues are being discussed such as operations, employee relations

and capex.

Action Taken Report

The Action Taken Report has been discussed and taken on record at

all the Board meetings.





discussed in detail in every meeting.


SURVEY REPORT


The Comptroller and Auditor General of India appoints the statutory

auditors of the company under section 619(2) of the Companies Act

1956 till the financial year ended March 31, 2014. The remuneration

payable to the auditors is fixed by the shareholders in the Annual

General Meeting.

5 Board Committees :

The Corporation does not have any Board Committees.

6 Process Enablers


. The Corporation has an Organization Structure with clearly defined

roles and responsibilities.


The delegation of powers from Board of Directors to Chairman, Vice

Chairman and Managing Director and Whole time Directors has been

prepared. The delegation of powers is in respect of monetary

transactions and employment.

6.3 Process Manuals

There are no Process Manuals.


The Statutory Auditors have reported that the internal control system

needs to be strengthened so as to be commensurate with the size

of the Corporation and the nature of its business. The areas that

need to be strengthened are identified as - purchase of inventory,

fixed assets and the sale of goods.

In the Annual Report 2012-13, observations have been made by the

Statutory auditors, which indicate that certain accounting policies are


SURVEY REPORT

not in conformity with the accepted accounting standards. These

observations relate to:

a. Non maintenance of fixed assets register showing full particulars

including quantitative details and situation of fixed assets.

b. Physical verification of fixed assets not been done.

c. Non maintenance of subsidiary ledgers and consequently the

reconciliation of the general ledger balances with the subsidiary

ledgers is not provided.

d. Annual Accounts for the year ended 31st March, 2012 are

subject to approval by the members in the Annual General

Meeting. [Consequently, the opening balances as on 1st April,

2012 as per audited financial statements are taken for the

purpose of preparing financial statements for the year ended 31st

March, 2013 are subject to approval by the members.(Note

No.33)

e. Interest accrued on confirmation and reconciliation on

Government loans of Rs.32.45 lakhs.

f. Capitalization of advances to sub contractors who have

abandoned the work of Rs.42.06 lakhs.

g. Advances to capital work/others, advances to staff and others for

expenses include large accumulated balances from earlier years

as well as in current year and remain unadjusted for work

done/expenses incurred resulting in under charge of work

done/expenses and overstatement of advances.(Note 29)

h. Provision for leave salary and pension for the Government

employees on deputation with the Corporation is not provided on

accrual basis.(Note No.27)

i. Undercharging of depreciation since separation of electrical

installations from buildings has not been done. (Note no.37 (d) )

j. Non-provision of loss on account of frauds reported relating to the

years 2008-09 to 2012-13 amounting to Rs.65.33 lakhs has not

been done. This has resulted in overstatement/ understatement

of profit/ loss.(Note. No.42)(1)(2)


SURVEY REPORT

k. The corporation has not determined the impairment loss, if any on

assets including leased assets under AS28 "Impairment of

assets." not determined.


According to the Statutory Auditors the internal audit has been

carried out on the transactions of APTDC upto the financial year

ended 31st March 2013. They have reported that the scope and

coverage of internal audit needs to be strengthened commensurate

with the nature and size of the business.


7.1 Annual Report

The Annual Report has made the mandatory disclosures but there is no

section on corporate governance.


There is no disclosure of interest document signed by the directors.


The related party transactions with companies in which the directors

are interested are not being disclosed or put up to the Board for

review. No disclosures have been made in the annual report on

related party transactions.


The Corporation has not revealed much of its information through its

website for its stakeholders.


SURVEY REPORT

Annexure 1


Rs. lakhs

Sl.No. 2012 2013

I EQUITY & LIABILITIES


b) Reserves & surplus 2275.14 2242.53

2629.83 2597.22 II Share application money pending

allotment 21.44 21.44

III Non current liabilities


b) Other long term borrowings 11369.22 20032.78


13553.66 21794.46

IV Current liabilities

a) Trade payables 1293.50 1853.90

b) Other current liabilities 1590.01 1742.94

c) Short term provisions 59.78 38.12

2943.30 3634.96

TOTAL 19148.23 28048.08

ASSETS

I Non-current assets

a) Fixed assets

1) Tangible assets 10192.51 10816.20

2) Intangible assets 8.75 7.87

3) Capital-work-in-progress 3513.41 5097.11

13714.66 15921.18

b) Deferred tax asset(net) 82.66 61.91

c) Long term loans and advances 1283.19 1429.84

1365.85 1491.75

II Current Assets



c) Cash and Bank Balances 3040.34 9278.96

d) Short term loans and advances 211.93 347.51


4067.72 10635.15

TOTAL 19148.23 28048.08


SURVEY REPORT

Annexure 1 Contd.


2012 2013

Income Rs. lakhs


Other Income 192.19 159.10

Total Revenue 13456.33 14150.21

Expenses

Operating expenses 6485.80 7050.59

Employee Benefits Expense 3460.50 3692.82

Finance Costs 73.15 107.22

Depreciation & Amortization 1205.36 1350.85

Other Expenses 1856.34 1960.61


Profit/Loss Before Tax 375.18 -11.87

Tax Expense:

Current Tax 57.97

Deferred tax (186.89) 20.75

Profit/Loss after tax 504.10 (32.62)

Earnings per Equity Share in Rs.

Basic & Diluted 142.13.13 (9.20)20


SURVEY REPORT

Annexure 2


1 Routine Business


Action taken report of the previous Board Meetings

2 Reconstitution of the Board

Appointment of directors, Resignation of Directors

3 Operations

Leasing of Hotels and Restaurants


4 Financial

Approval of financial accounts of the corporation for the year ended 31st March,2013.

Action Plan for the Financial Year 2013-14

Appointment of Statutory Auditors of the corporation.

Delegation of powers – Operational matters

5 Capex

Procurement of boats for Hussain Sagar & Srisailam boating units

Replacement and purchase of New Buses in Transport Wing

Construction of hotel rooms, Budget Hotel at Alipiri, Tirupathi,

and Chittoor District

6 Review of Legal Compliance

7 Employee Remuneration

Consideration of adoption of orders issued by the Govt. with reference to employee remuneration.

Compassionate appointments to the dependents of contract employees died while on duty.

Recruitment of Staff in F&B Wing of Hotels.


SURVEY REPORT

Survey Report 8

THE ANDHRAPRADESH MINERAL DEVELOPMENT

CORPORATION LIMITED (APMDCL)

1 Company profile

1.1 Incorporation

The Andhra Pradesh Mineral Development Corporation Ltd.

(APMDCL) was incorporated on 24th February, 1961 and

registered under the Companies Act, 1956 with an authorized

capital of Rs.50.00 lakhs with full participation by Government of

Andhra Pradesh. The authorized capital was increased over a

period of time and is now Rs.10 crores against a paid up capital

of present Rs.6.3 crores.

The registered and head office is at Hyderabad. Branch offices

are situated at Mangampet, YSR Kadapa District,

Dwarakatirumala, West Godavari District, Piduguralla, Guntur

District, Khammam, Visakhapatnam and Cheemakurthi,

Prakasam Districts.


The accounts are audited up to financial year ended 31st March

2010.

The sales turnover of the Corporation for the year 2009-10 was

Rs.217 crores as against Rs.156 crores during the previous year.

The net profit for the year was Rs.55 crores, up from Rs 44

crores last year. Other income was also up at Rs 20 crores

compared to Rs 17 crores in the previous year. The summary of

financial results are in Annexure 1.


SURVEY REPORT

The financial statements for the financial year 2012-13 are ready

but awaiting the approval in the Annual General Meeting. The

Company have earned record revenue of Rs. 659 crores during

the year 2012-13, which is 75% higher than the previous year. It

is reported from discussions with the executives of the Company

that the net worth will reach a record high of Rs. 751 crores,

which is 80% higher than the previous year. The Corporation also

earned a record provisional profit after tax of Rs. 334 crores in

2012-13 which is 124% higher than the previous year. The

Corporation paid a record advance tax of about Rs. 158 crores for

Assessment Year 2013-14.


The present manpower of the Corporation both technical and non-

technical is 302. The annual budget for salary and wages is about

Rs. 8.50 crores. The employee provide is given in table 1 below

and shows that there is a significant gap in the ‘others’ category.

Table 1


Sl.

No. Designation

Sanctioned

Strength Filled Gap

1 Executive Director 1 1 0

2 General Managers 4 4 0

3 Addl. General Managers 2 2 0

4 Dy. Managers 27 22 5

5 Asst. Managers 36 32 4

6 Others 411 206 205

Total 481 267 214



SURVEY REPORT

2.1 Objectives

The objectives of the Corporation are:

� To become a model Public Sector Undertaking (PSU) by

demonstrating sustained growth and profitability, operational

efficiency and to maximize value to the shareholder.

� To lay focus on capacity building and adoption of technology

in development, exploration and beneficiation of mineral

resources.

� To encourage and facilitate investment through Public –

Private – Participation (PPP).

� To explore new markets Nationally and Internationally.

� To become socially responsible and eco-friendly by adopting

cleaner technologies and sustainable policies reflecting the

best in the industry.

2.2 Vision

The Company’s Vision statement is given below:

"The most valued Company for sustainable development of

minerals with commitment for environment protection and safety,

and to become the leader in mining by optimal utilization of

resources, creating added value and with sustainable growth".

2.3 Mission

The Company’s Mission statement is given below:

"Exploration and exploitation of mineral resources with due

emphasis on environment & safety and development & promotion

of mineral based industries adopting innovative technology and

advanced skills for accelerated and sustainable growth".

2.4 Values


SURVEY REPORT

The Corporation does not have a stated value statement.


The Corporation framed Citizens Charter to discharge its

obligation towards Customers.


The Company does not have a Code of Conduct for Employees, but It

has Service Rules for its employees.

2.7 Safety, Health and Environment Policy

The Corporation has formulated a Health Care Policy from the

year 2012-13 for maintenance of health and prevent diseases for

its employees, their family members and inhabitants living in the

vicinity of its project sites.

2.8 Quality Policy

The Corporation does not have a stated quality policy statement.


The Corporate Governance Code is not applicable to the Corporation.

3 Board Structure


There are 5 directors on the Board. The Chairman & Managing

Director position have been separated. All the Board positions,

other than the Vice Chairman & Managing Director are ex-ooficio

positions.

Table 2


SURVEY REPORT


Sl. No

Name Designation

1. Sri.Sabyasachi Ghosh, IAS Chairman

2. Dr. T R K Rao , IRTS Vice-Chairman & Managing Director

3. Sri Y. Ramakrishna

Addl. Secretary to Govt. Finance Dept.

4. Sri. B.R.V. Susheel Kumar Director of Mines & Geology

5. Sri. Shankar Joint Secretary to Government Industries & Commerce Department

3.2 Tenure of Vice Chairman & Managing Director

The tenure of the Vice Chairman & Managing Director is given in

table 3 below. It shows that there have been frequent changes in

the Chairman Post sometimes even 4 months. Further the Vice

Chairman & Managing Director has also been changed very

frequently excepting for Mr. Rajajgopal who has successfully

completed 5.5 years.

Table 3

Tenure of Chairman

Sl. No.

Name of Chairman Date of Joining

Date of Separation

Tenure in years

1. Smt. Y. Srilakshmi IAS 14-02-2007 01-11-2009 2.7

2. Sri M. Veerabhadraiah IAS 02-11-2009 22-04-2010 0.5

3. Smt. Ranjeev R. Acharya, IAS 22-04-2010 18-06-2011 1.2

4. Dr. Prem Chand IAS 18-06-2011 29-02-2012 0.75

5. Sri Ajay Mishra IAS 28-03-2012 20-06-2012 0.25

6. Sri D. Srinivasulu IAS 21-06-2012 30-06-2013 1.0

7. Sri Sabyasachi Ghosh IAS 01-07-2013 Till date

Table 3 Contd.

Term and Tenure of Vice Chairman & Managing Director

Sl. No.


Date of Separation

Tenure in years

1. Sri. V D Rajagopal 26-06-2004 03-01-2010 5.5

2. Sri Praveen Prakash IAS 04-01-2010 18-05-2011 1.5

3. Sri. Mukesh Kumar Meena IAS 19-05-2011 30-06-2013 2.0

4. Dr. T R K Rao IRTS 01-07-2013 Till date



SURVEY REPORT



There are no independent directors on the Board.


APMDCL has a full time Company Secretary to look after legal

and secretarial matters of the Corporation.

4 Board Processes


The frequency of the Board meetings have been extremely high

and sometimes meetings have been held even once a month.

Table 4


Sl. No. Board Meeting No

Date Gap in Months

1 353 30-06-2010

2 354 30-09-2010 2

3 354 Adj. 11-11-2010 1

4 355 15-02-2011 2


Sl. No. Board

Meeting No Date

Gap in Months

1 356 30-06-2011 3

2 356 Adj. 19-07-2011 0

3 357 30-09-2011 1

4 357 Adj. 03-10-2011 0

5 358 30-12-2011 1

6 359 27-02-2012 1



SURVEY REPORT

Sl. No. Board

Meeting No Date

Gap in Months

1 360 27-06-2012 3

2 361 27-09-2012 2

3 361 Adj. 05-10-2012 0

4 362 24-12-2012 1

5 363 15-03-2013 2


Sl. No. Board

Meeting No Date

Gap in Months

1 364 27-04-2013 0

2 365 27-05-2013 0

3 366 29-06-2013 0

4 367 06-08-2013 1

5 368 10-10-2013 1

6 369 09-12-2013 1

7 370 10-01-2014 0

8 371 13-02-2014 0


From the table 5 below it is observed that most of the Directors are

present at the meetings, however there are some meetings where

there are two or three directors present.

Table 5


Sl. No.

Board Meeting No

Date Directors Present

Directors Absent

Total

1 353 30-06-2010 5 0 5

2 354 30-09-2010 2 3 5

3 354 Adj. 11-11-2010 4 1 5

4 355 15-02-2011 5 0 5



SURVEY REPORT

Sl. No.

Board Meeting No


Directors Absent

Total

1 356 30-06-2011 3 2 5

2 356 Adj. 19-07-2011 5 0 5

3 357 30-09-2011 5 0 5

4 357 Adj. 03-10-2011 5 0 5

5 358 30-12-2011 4 1 5

6 359 27-02-2012 4 1 5


Sl. No.

Board Meeting No


Directors Absent

Total

1 360 27-06-2012 4 1 5

2 361 27-09-2012 3 2 5

3 361 Adj. 05-10-2012 4 1 5

4 362 24-12-2012 3 2 5

5 363 15-03-2013 4 1 5


Sl. No.

Board Meeting No


Directors Absent

Total

1 364 27-04-2013 5 0 5

2 365 27-05-2013 3 2 5

3 366 29-06-2013 4 1 5

4 367 06-08-2013 5 0 5

5 368 10-10-2013 4 1 5

6 369 09-12-2013 4 1 5

7 370 10-01-2014 3 2 5

8 371 13-02-2014 4 1 5


Table 6

FREQUENCY OF BOARD MEETINGS AND NUMBER OF TRANSACTIONS 2010-11

Sl. No. Board

Meeting No Date No of Transactions

1 353 30-06-2010 35

2 354 30-09-2010 0

3 354 Adj. 11-11-2010 43

4 355 15-02-2011 20

FREQUENCY OF BOARD MEETINGS AND NUMBER OF


SURVEY REPORT

TRANSACTIONS 2011-12

Sl. No. Board


1 356 30-06-2011 0

2 356 Adj. 19-07-2011 42

3 357 30-09-2011 0

4 357 Adj. 03-10-2011 33

5 358 30-12-2011 24

6 359 27-02-2012 28


Sl. No. Board


1 360 27-06-2012 49

2 361 27-09-2012 24

3 361 Adj. 05-10-2012 30

4 362 24-12-2012 37

5 363 15-03-2013 38


Sl. No. Board


1 364 27-04-2013 20

2 365 27-05-2013 06

3 366 29-06-2013 29

4 367 06-08-2013 29

5 368 10-10-2013 24

6 369 09-12-2013 21

7 370 10-01-2014 14

8 371 13-02-2014 07

Action Taken Report






SURVEY REPORT


meeting.


The Comptroller and Auditor General of India appoints the statutory

auditors of the company under section 619(2) of the Companies Act

1956. The remuneration payable to the auditors is fixed by the

shareholders in the Annual General Meeting.




Business Plan


observed that the business plan and strategy of the company are

items on the agenda in the quarterly Board Meetings. .

5 Board Committees

The Corporation does not have any Board Committees.

6 Process Enablers


The Corporation has a well laid out Organisation Structure.


Clear cut delegation of powers are in place for the operations of

the corporation flowing from Board of Directors down to the

Managers and Officers of the Corporation.

The Vice-Chairman & Managing Director (MD) is assisted by

Director (Mines and Geology). There are presently three General

Managers, two Assistant General Managers and one qualified

company Secretary at the Head Office.


SURVEY REPORT

6.3 Process Manuals – ISO/Others

In order to obtain efficient, effective and quality output and

strengthen internal capabilities, standardize norms, thereby

transform APMDCL into a global company, the Corporation

introduced Policy Reforms and formulation of policies and

preparation of manuals related to Policy on Finance, HR Policy,

Energy Audit Policy, Environmental Policy and Procurement

Policy are under finalisation.


The Corporation has adopted e-auction for the first time in its

history for sale of minerals from the year 2012-13.

The Corporation has also developed in house technology of

generating digital maps of different thematic layers viz., geology,

structure, land use and land cover and now fully equipped with

both software and hardware capabilities for generating, modifying

and publishing of all kinds of geo referenced and digital maps.

6.5 Internal Controls – Internal Audit Observations

The Statutory Auditors, have in their report commented that the

Corporation has to strengthen its internal audit system

commensurate with the size and nature of its business. There are

observations made by the auditors relating to non conformance to

accepted accounting policies, which are given in Annexure 2.


7.1 Annual Report

The disclosure of information in the Annual Reports of the

corporation is informative and transparent.




SURVEY REPORT


The related party transactions are being put up to the Board for

review.

7.4 Qualifications/Observation by auditors

The Statutory Auditors and the Comptroller & Auditor General of

India have commented on the Accounts of the Corporation for

the financial year ended 31st March, 2010 as below.

From the year 2009-10, the Company has started valuing the

‘Mud Chips’ at weighted average cost of ‘B’ Grade or net

realizable value whichever is lower. The impact of the change in

valuation method of Rs.63.91 lakhs on the current year profit has

not been disclosed.

During the audit of year 2009-10 audit pointed out that, the

Corporation sold 1.61 lakh tones of C+D+Waste Barytes lumps for

Rs.624.64 lakhs but did not value the closing stock of

C+D+Waste of 36,95,541.365 tonnes as on 31-03-2010 part of

which was later sold during the years 2010-11 to 2012-13. As the

Corporation has been selling C+D+Waste regularly and has been

realizing substantial amounts, the stocks should have been valued

by ascertaining the saleable quantity of C+D+Waste at net

realizable value.


The Corporation's website contains elaborate information with

regard to the ownership, capital structure, business, Management

Structure. However details of audited financial statements have

not been disclosed finding their place on the Website.

Annexure 1

BALANCE SHEET AS AT 31st MARCH


SURVEY REPORT

Rs. lakhs Sl.No. 2008 2009 I. EQUITY & LIABILITIES

1 Shareholders' funds a) Share capital 630.62 630.62 b) Reserves & surplus 15325.92 20790.13 Deferred Government Grant

2 Unsecured Loans 3389.78 0.00

Net Deferred Tax Liability 0.27 0.25 TOTAL 19,346.59 21,421.00 II. ASSETS

1 a) Fixed assets Gross Block 1605.03 1628.02

Less: Depreciation 739.95 791.83 Net Block 865.08 836.18 Capital Work in progress 3.59 8.39 Leasehold Mining rights 66.61 44.40 935.28 888.97

Investments 334.11 451.68 Deferred Tax asset 59.40 150.26

2 Current Assets Inventories 989.44 1641.43 Sundry debtors 2249.25 2278.36 Cash & Bank balances 14384.68 16775.47 Other Current assets 678.13 602.22 Loans & Advances 5169.90 5293.48

23471.40 26590.95

Less: Current Liabilities and Provisions

Current Liabilities 4412.77 4620.69 Provisions 1040.80 2040.17 5453.57 6660.87

Net Current assets 18017.83 19930.09

TOTAL 19,346.59 21,421.00


SURVEY REPORT

Annexure 1 Contd.


Rs. lakhs

2008-09 2009-10

INCOME

Sales 15647.03 21699.85

Other income 1698.14 1975.04

Total Revenue 17,345.17 23,674.89

EXPENSES

Purchases 9260.16 12812.15

Interest 71.77 162.61

Wages 1231.18 1937.62


Amortization of leasehold Mining rights 22.20 22.20

Fixed Assets written off 0.00 16.43


Profit before exceptional and extraordinary

items and tax 6668.99 8640.50

Prior Period Items (0.79) 256.91

Profit before tax 6,669.78 8,383.59

Tax expense

1) Current tax 2224.45 2976.07

2)Fringe Benefit Tax 8.00 0.00

3) Deferred tax 69.48 (90.87)

Profit for the year 4,367.84 5,498.39

Surplus B/F from Previous Year 4911.09 8585.06

Reserve for Doubtful Debts (75.82) (1.67)

Profit available for appropriation 9203.11 14081.79


SURVEY REPORT

Annexure 2

IRREGULARITIES RELATED TO PROCEDURES

Provisions

� Non provision of contribution payable towards mining resources and

technology up gradation fund aggregating to Rs.81.35 Crores.

� Overstatement of provision for Reclamation and Rehabilitation of

mined out areas and understatement of profits by Rs.75.68 Lakhs.

� Non provision of Interest accrued and receivable from Post Office

savings Accounts resulting in understatement of profits by Rs.1.45

lakhs and current assets by Rs.10.17 lakhs.

Accounting

� Non Provision of Rs.469.17 lakhs in the accounts on claims against

the company as per arbitration award resulting in overstatement of

profits to that extent.

Inventory

� Non disclosure of Rs.63.91 lakhs impact in the profit due to change in

the valuation method of “Mud Chips”.

� Non valuation of saleable quantity of C+D+waste barytes lumps in the

Closing stock.

Receivables

� Confirmation of balances outstanding to the debit and credit of the

parties not obtained

Deposits & Advances

� investment in fixed deposits with banks, proper authorization has been

done without approval by the board of directors in accordance with the

act resulting in alleged financial irregularities.


� Disclosure of Rs.41.51 lakhs held in Post Office Savings Accounts

under Cash and Bank balances instead of Deposits.


SURVEY REPORT

Annexure 4




Action Taken Report arising from previous meetings


Changes among directors

3 Operation Related

Major decisions on policy matters relating to the business

Opportunities for new businesses

Evaluation of joint ventures based on commercial considerations.

4 Financial Related

Financial performance of the Corporation

Approval of capital and revenue budget


Approval of capital expenditure

6 Statute Related

Status of pending legal cases.

7 Employee Remuneration Related

Approval of promotion to employees

Review and approval of compassionate appointments of

employees.

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